NVIDIA growth is strong, but investors do not celebrate

For most other companies, the results will be a home operation. But for Nevidia, which The quarterly financial statements have become a test for the mutation of artificial intelligence, Wall Street was not convinced. The shares decreased by more than 3 % in trading after working hours, as the chip maker was not less than most of the most optimistic expectations in Wall Street. The arrow was traded in the pre -market, a decrease of about 1.3 %.

The market reaction is somewhat contradictory: NVIDIA basic business is still prosperous, as the company has reported a leap in sales of more than 50 %. However, the company made a little difference in the estimates of the data center revenue.

“The revenues of Miss on Data Center weighs despite the name despite the broader rhythm,” said Ryan Lee, First Vice President of the Product and Strategy.

Investors Similarly ignore a similar beauty queen In the last quarter, but this time, it is possible that it will defend the last nervousness that the artificial intelligence sector may be in a Financial bubble, The arrow stumbles after the profit report.

“The pricing to perfection leaves a small space for error, and left traders wanting more of this quarter,” said Jake Bihan, President of Deretheon, Jake Bihan. “When any company trades in such high complications, anything less than exceptional begins to look a problem. The NVIDIA revenue expectations were not bad, but it lacks the upper direction that the market was searching for.”

Vapi investor turned

Nvidia is my beloved AI BOOM. The company’s evaluation has been pushed into new heights where technology companies flow to millions in Amnesty International’s infrastructure, which increases the demand for AI chips in NVIDIA. In July, the chip maker became the first publicly circulated company to achieve a market value of $ 4 trillion.

The result of this pioneering success in the industry is that the company’s performance is now seen as an agent of the broader artificial intelligence market. Investors, who are already concerned about the recent concerns of bubbles, and the study of the Massachusetts Institute of Technology found that most companies did not make meaningful gains from artificial intelligence pilots, they are excessive in any signs of decline in demand.

Bubble concerns can be bad for both NVIDIA’s evaluation and customer base from cloud giants and well -emerging companies from artificial intelligence, but their last profits do not draw a picture of the spending of artificial intelligence. In fact, CEO Jensen Huang said that the company expects to see between 3 to 4 trillion dollars in spending on Amnesty International’s infrastructure by the end of the contract.

“If you are waiting for clear signs of slowdown in artificial intelligence, you will not get it exactly,” Behan said. “This quarter shows that NVIDIA is still firmly in the game, as it moves in geopolitical disorders and organizational challenges while maintaining its leadership in the area of ​​artificial intelligence.”

Instead, the market reaction may indicate a flood of how investors see the artificial intelligence sector. Over the past few years, investors have largely looked at simple losses and high evaluations, as they dealt with rapid spending of artificial intelligence as being given and betting that the demand will continue to accelerate through the surplus players and emerging companies alike. But now, even small revenues lack geographic obstacles, such as NVIDIA’s uncertainty about China sales, attract attention, indicating that investors are no longer ready to give the sector the same benefit from doubt.

“The market has been used to overcome it,” said Melissa Auto, head of Alpha Visual Research at the S & P Global. luck. “Although it was a good number, essentially, the company is in good condition, the expectations are high, the evaluation is not cheap. And while we look forward, the question is, are the assumptions still possible, and can there be some profit reviews?”

She pointed out that NVIDIA’s instructions were in line with expectations from the sales perspective, but slightly less than the margins. In the call, NVIDIA Financial Director Colette Chris also indicated that the company is planning to increase its expenses, which Auto said can demand margins either to a flat line or pressure in the second half of the year, which led to some profit growth.

She said: “Over the past two years, NVIDIA has completely determined the weight,” she said. “So the question is, where does that go after that? We are trying to understand if we will see another $ 200 billion in profit reviews now, based on Opex and what we have seen from the revenues this quarter, it seems that, at least in the short term, it seems silent.”

Geopolitical difficulties

China is another painful spot for Nevidia. The company relied on China’s sales for an additional batch of its numbers in the past, but the uncertainty prevented it from including any revenues in the results of the second quarter.

For several months, NVIDIA was stuck in the organizational forgetfulness on H20 chips, which are subject to the export controls of the new United States. Earlier this month, NVIDIA and AMD concluded a deal with the Trump administration to grant Licensing in exchange for revenue sharing by 15 % Arrange on China chips sales.

Before the call, analysts expected that NVIDIA will not hint at China’s revenues in the profit report. Meanwhile, financial director Colette Chris said that the company recorded any H20 sales to China in a quarter because 15 % has not been coded in regulations although some customers receive licenses in recent weeks.

The company estimates that it can charge $ 2 billion to $ 5 billion in the next quarter of H20S if the restrictions are reduced, but none of these revenues have been baked in its expectations. This may be a problem for NVIDIA because reaching the Chinese market may be it is very important for the company, as CEO Jensen Huang described China as a $ 50 billion market this year alone.

The company also faces an increasing competition from local Chinese chip makers like Huawei Cambricon, which is technically knee and benefits from the support of the local government. In its files, Nvidia has warned that it may be effectively banned from the Data Center market in China if it is unable to obtain organizational approval. At the same time, the ecological system in China, especially the development of an open source model, flourishes. Huang stressed that NVIDIA continues to defend the US approval to bring Blackweell chips to China, describing it as a “real possibility” and an important part of preserving the American leadership in artificial intelligence technology.

“The Chinese situation is a reminder that regardless of the strength of the company, the total forces are still important – the organization, commercial tensions, and global policy are now part of the equation,” said Kate Lean, chief market analyst in Avaver.