The stock earnings season in the United States is coming to an end, most of the companies from the S&P 500 stock index have already presented their quarterly financial results. However, the general investor public was waiting for one company in particular.
Nvidia, the leader in the development of graphics chips that power ChatGPT and other artificial intelligence applications, revealed the numbers after the end of the US trading session on Wednesday.
Perhaps no one doubted that the world’s second most valuable company by market capitalization (the first is Apple) would show strong results. The main question was whether and how significantly they would exceed market expectations and what the company’s outlook would be for the next period.
The American firm increased net income to $16.95 billion in the fiscal second quarter of 2025, which ended July 28, from $6.74 billion in the same period a year earlier. This represents an increase of 152 percent. At the same time, the consensus of analysts expected a profit of 14.95 billion dollars.
The company’s sales also grew significantly, which Nvidia more than doubled compared to last year to $30.04 billion. Also at this level, the company exceeded market estimates, which counted on a value of $28.85 billion. By far Nvidia’s biggest source of revenue is its data centers, which generated $26.27 billion in revenue versus expectations of $25.07 billion.
The firm also reported growth in adjusted earnings per share of $0.68, up 152 percent year-over-year. This is a financial indicator that indicates how much profit per share of a company. Simply put, it is the part of the company’s profit that would theoretically be collected by each shareholder if it were all distributed equally among all issued shares.
This figure also beat the Wall Street estimate of $0.64 per share.
Optimistic outlook
The market was also anxiously awaiting the company’s outlook for the fiscal third quarter, with analysts estimating a three-quarter year-over-year rise in revenue from $18.1 billion to $31.7 billion. However, the company expects even higher sales, which should reach the level of 32.5 billion dollars with a plus or minus two percent deviation.
In an immediate reaction to the economic results, the company’s shares nevertheless depreciated around five percent to $120 a piece after the market closed, before later erasing some of the decline.
According to analyst Tomáš Cverna from the brokerage company XTB, Nvidia posted great results again. However, according to him, the market “unofficially” expected a higher growth rate, which is why stocks responded by falling. Nvidia even beat estimates for gross and operating margins and reported year-on-year growth, which the analyst says confirms its strong market position against competition, which is now mainly AMD.
“Great results as such were already indicated by the publication of the sales of Taiwan’s TSMC, which manufactures chips for Nvidia. In addition, the company is very strongly supported by the fight between Alphabet, the parent company of Google, and Microsoft. Because of the competitive struggle, both companies spend high capital costs – over ten billion dollars per quarter – to keep up with the implementation of various AI gadgets in their products,” Cverna evaluates the results for SZ Byznys.
The value increased nine times
The frenzy surrounding the artificial intelligence industry is also evidenced by the development of the company’s shares since the beginning of the year, which have already appreciated by 161 percent. Since the end of 2022, when the fever around artificial intelligence broke out in full, the value of the company has increased approximately nine times.
Ondřej Hartman, private investor and founder of the trading portal FXstreet.cz, comments on Nvidia’s results for SZ Byznys that, after the rocket growth of its business and share price, the company is now vying for the position of the most valuable company in the world with Apple and Microsoft, while the market capitalization of each of these companies exceeds three trillion dollars.
“So the question is: Does Nvidia still have room to grow? As for the share price, it will be very difficult for Nvidia, because it has to confirm the highly optimistic expectations of investors with continuous profit growth.”
Hartman also points out that Nvidia needs to grow revenue by at least 20 percent year-over-year in the coming years while maintaining its exceptional 78 percent margin to justify the current high expectations.
“If the general buzz around artificial intelligence lasts and the market is willing to buy extremely powerful chips, sales will not be a problem. However, competition, which will also want to take a bite out of such high margins, can cause difficulties for increasing profits,” he claims.
According to Hartman, the investment in Nvidia shares is, among other things, a bet that the company will maintain a “monopoly” position in the semiconductor market, similar to Apple in the smartphone market or Alphabet (Google) in Internet search engines.
