Despite beating Wall Street forecasts for its Q2 earnings report on Wednesday, Nvidia (NVDA) stock is down just over 1% in the last 24 hours. The drop happened because data center revenue was missed by analysts, and China restrictions are still weighing on investor sentiment right now. The Nvidia stock earnings report showed $46.7 billion in revenue along with $1.04 adjusted EPS, both numbers that exceeded what analysts were expecting, yet Nvidia (NVDA) stock price declined anyway due to concerns about geopolitical risks and some slowing growth momentum.
NVIDIA’s H20 chip sales in China are currently in jeopardy due to an impasse in the U.S. Government decision. On top of that, the decision of the Chinese authority is encouraging the use of indigenously developed AI chips instead of NVDA’s GPUs. As a result, NVDA did not count H20 chip sales to China while issuing its fiscal third-quarter guidance. Fortunately, Nvidia did say that the resumption of H20 sales in China could add another $2 to $5 billion in the third quarter. Thus, would it be smart to buy the temporary dip in NVDA stock.
Previously, Options traders suggested that Nvidia (NVDA) could see a $260 billion swing in market value following its Wednesday Q2 earnings report. However, the semiconductor giant hasn’t fulfilled that projection yet. Fortunately, Analysts are viewing the Nvidia stock decline as potentially overblown right now. Wolfe Research’s Chris Caso called the guidance “a touch low” but confirmed Blackwell chips remain on track. Despite short-term Nvidia stock volatility, WedBush Securities has maintained bullish forecasts for AI infrastructure demand.
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Some Wall Street experts see the Nvidia (NVDA) stock reaction as a buying opportunity, with underlying AI fundamentals supporting long-term growth despite current China-related headwinds that are affecting Nvidia stock performance at the time of writing. At press time, NVDA is trading near the top of its 52-week range and above its 200-day simple moving average. Analysts remain bullish that the stock will rebound, making the present a solid buying opportunity for investors.
According to CNN Business, Nvidia (NVDA) is currently a 9/10 stock choice on the market. Out of 65 analysts surveyed by the platform, 89% suggest buying the stock, while 9% suggest holding, and only 2% think now is the time to sell.