Nvidia Shares Fall 3 Percent to $220 as Traders Fade Post-Earnings Rally After Record Quarter

SANTA CLARA, Calif. — Nvidia Corp. shares fell about 3.3 percent on Friday, trading near $220.38, as investors locked in gains a day after the chipmaker’s latest results sent the stock sharply higher.

The decline of roughly $7.60 came after Thursday’s surge, when Nvidia added hundreds of billions of dollars in market value following fiscal second-quarter figures that again beat Wall Street forecasts. The pattern is familiar: the company has topped estimates for several consecutive quarters, yet the stock has often slipped in the sessions around those reports as traders treat even strong numbers as a chance to sell.

For the quarter ended July 26, Nvidia reported revenue of $96.22 billion, more than double the year-earlier total and above consensus estimates near $92 billion. Adjusted earnings were $2.22 a share, versus forecasts around $2.09. GAAP net income was $59.69 billion, or $2.46 a share. Data-center revenue, the core of the business, reached $89 billion, up 117 percent from a year earlier.

Chief Executive Jensen Huang said in a statement: “A.I. has reached its inflection point.” In a longer version of the same message he added that AI is “doing useful work,” that “its tokens are productive and profitable,” and that “now, compute is revenue.”

The company forecast current-quarter revenue of about $108 billion, plus or minus 2 percent, above analyst estimates near $104 billion to $105 billion. That would be Nvidia’s first quarter above $100 billion. Chief Financial Officer Colette Kress said the firm expects about 70 percent revenue growth in fiscal 2028, which runs from February 2027 through January 2028. She said demand is higher than that figure but the company is constrained by how much product it can supply. Huang said demand “is much greater than 70 percent.”

Gross margin was about 75 percent in the quarter. Nvidia also pointed to a broadening customer mix. AI cloud, industrial and enterprise customers accounted for $40.3 billion in sales, up 138 percent year over year. Hyperscale revenue was $49 billion. Management said Vera Rubin chips are in production and expected to contribute a meaningful share of data-center sales in the current quarter.

The report arrived after a seven-session losing streak into the print, Nvidia’s longest such run since 2022. Shares had fallen about 7 percent over that stretch as investors questioned valuations, circular financing with large AI customers, rising memory costs and possible price increases of as much as 15 percent on AI servers next year. Some analysts also flagged custom chips being developed by hyperscalers and model labs as a longer-term competitive risk.

Thursday’s bounce showed that the numbers still matter. Friday’s pullback showed that the bar remains high. At a market value still measured in the trillions, investors have grown used to extraordinary growth and now parse guidance, supply comments and customer concentration as closely as the headline beat.

Kress said that without supply limits, growth could be even faster. Memory shortages are squeezing the entire AI hardware chain, a theme that has also hit other semiconductor names. Nvidia has raised prices in response to component inflation, a move that can protect margins but also underscores how expensive the buildout has become for customers.

The company returned a large sum to shareholders in the period, including tens of billions of dollars in buybacks. GAAP earnings were boosted in part by gains on equity stakes in other firms, a reminder that Nvidia’s results now include investment marks as well as chip sales.

Wall Street remains broadly constructive. Some analysts have argued the stock’s forward multiple looks modest relative to expected growth still above 20 percent in later years. Others say a $5 trillion-class company simply has less room for multiple expansion and that any hint of slower growth or tighter supply will keep triggering sell-the-news reactions.

Friday’s trade left Nvidia well below its May closing high near $236 but above the pre-earnings slide into the low $210s. Year-to-date gains remain in the low double digits, trailing some other semiconductor names that started from smaller bases.

The debate around Nvidia has shifted from whether AI demand is real to how long customers can fund data-center construction, how much of that spend stays on Nvidia silicon, and whether price and supply constraints will cap the next few quarters. Huang’s “inflection point” language was meant to answer the first question. The $108 billion guide and 70 percent longer-term growth comment were meant to answer the second.

Traders on Friday treated those answers as already priced in after Thursday’s jump. That does not erase the scale of the quarter. It does show how quickly the market resets after each Nvidia report: celebrate the beat, then ask what the next one must deliver.