Nvidia posts record sales, but shares drop

Nvidia posted record revenue of $46.7 billion in the July quarter, with net income soaring 59% to $26.4 billion.

Data-center sales, which account for 89% of revenue, jumped 56% to $41.1 billion but slightly missed Wall Street’s $41.3 billion estimate, sending shares down nearly 3% in after-hours trading.

Outlook dampens investor confidence
The company projected $54 billion in revenue for the third quarter, which is well above analyst forecasts, but it was viewed as underwhelming after consecutive blockbuster quarters. 

A $4 billion hit from halted H20 chip sales in China weighed on results, marking the second straight miss in data-center growth. 

Nvidia sold $180 million of previously ordered H20s in China and $650 million to an unrestricted customer abroad.

AI boom and buybacks fuel optimism
CEO Jensen Huang expects AI companies to spend $3 trillion–$4 trillion over the next five years and believes Nvidia could capture as much as 70%.

To boost shareholder returns, Nvidia authorized $60 billion in buybacks and highlighted strong demand for its new Blackwell GPUs.