Nvidia stock actually fell about 3% in after-hours trading Wednesday, even though the company beat Q2 earnings expectations. 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.
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Nvidia Stock Earnings Report Shows Mixed Q2 Results And China Risks
Strong Revenue Growth Meets Wall Street Skepticism
The Nvidia Q2 earnings 2025 results actually demonstrated continued AI demand with revenue jumping from $30 billion year-over-year. Data center revenue reached $41.1 billion, but it missed the $41.34 billion estimate that was expected due to zero H20 chip sales to China. Nvidia stock news has been focused on this revenue gap as investors are questioning growth sustainability right now.
The company stated in its earnings announcement:
“There were no H20 sales to China-based customers in the second quarter.”
Forward Guidance Beats Despite Uncertainties
Did Nvidia beat earnings guidance expectations? Yes – Nvidia stock guidance of $54 billion for Q3 actually exceeded the $52.76 billion consensus that Wall Street had. However, this excludes potential China sales, which is creating some uncertainty around actual performance going forward.
During the Nvidia earnings call, CFO Colette Kress also stated:
“While a select number of our China based customers have received licenses over the past few weeks, we have not shipped any H20 based on those licenses.”
The Nvidia earnings call revealed there’s potential upside if tensions ease. Kress noted the company could generate between $2-5 billion in H20 revenue if geopolitical issues were to subside.
Long-term AI Outlook Remains Positive
CEO Jensen Huang emphasized China’s market value during the Nvidia earnings call, describing it as:
“$50 billion of opportunity, if we were able to address it with competitive products.”
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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Wall Street sees 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.