NVIDIA’s recent financial report for the second uarter of fiscal 2026 has been met with a mixed market reaction, with the stock experiencing a sell-off despite beating analyst expectations for both revenue and earnings. This dynamic appears to be driven by a nuanced interpretation of the company’s performance, focusing on the pace of growth in its core data center business and its forward-looking guidance.
For the quarter that ended July 27, 2025, NVIDIA announced revenue of $46.7 billion, surpassing the consensus forecast of $46.13 billion. The company also reported adjusted earnings per share of $1.05, exceeding the estimated $1.01. However, following the announcement, the stock dropped by approximately 3%, creating a debate among analysts and investors.
The primary point of contention and the root of the sell-off is the slight deceleration in growth from NVIDIA’s core Data Center business. While the segment’s revenue grew 56% year-over-year to $41.1 billion, this was slightly below the $41.3 billion that analysts had projected. For a stock that has soared on the promise of uninterrupted, meteoric growth, this minor shortfall in its primary growth engine was enough to trigger a reassessment by some investors.
Conversely, some analysts remain bullish. J.P. Morgan, for example, maintained its “Overweight” rating and raised its price target for NVIDIA to $215 from a previous $170. The firm cites the company’s robust AI infrastructure pipeline and future product ramps as key drivers for continued upside. This perspective suggests that the recent stock pullback is a temporary reaction and that NVIDIA’s long-term growth story remains intact, underpinned by the ongoing global build-out of AI infrastructure.
The guidance for the third quarter also played a role in the market’s mixed reaction. NVIDIA provided a revenue forecast of $54.0 billion, plus or minus 2%. This figure is ahead of analysts’ expectations of $53.1 billion. The company noted that this guidance does not include any potential H20 chip sales to China, which could add a significant amount if geopolitical issues are resolved.
Disclaimer: This analysis is based on publicly available information and is for informational purposes only. It does not constitute financial advice. Market conditions are dynamic, and predictions are inherently uncertain.
