Nvidia Exceeds Q2 Expectations, Unveils $50 Billion Stock Buyback Plan, But Shares Drop 6%

NVIDIA (NASDAQ:NVDA) exceeded market expectations with its Q2 earnings report on Wednesday and unveiled a massive $50 billion stock buyback program. Despite the positive news, shares of NVIDIA dipped more than 6% intra-day on Thursday.

For the quarter, Nvidia posted adjusted earnings of $0.68 per share, surpassing analysts' predictions of $0.64. The company's revenue also outperformed expectations, coming in at $30.04 billion, compared to the Street estimate of $28.68 billion.

A significant driver of this robust performance was a remarkable 154% year-over-year increase in data center revenue, which reached $26.27 billion.

Looking ahead to Q3, Nvidia anticipates revenue of $32.5 billion, plus or minus 2%, again exceeding Wall Street's expectations of $31.9 billion.

In a strategic move to return capital to shareholders, Nvidia's board has approved an additional $50 billion for its stock repurchase program. Moreover, Nvidia announced plans to accelerate the production of its Blackwell AI chips, with shipments expected to generate "several billion dollars in Blackwell revenue" starting in Q4 and extending into fiscal 2026.

The company also maintained its non-GAAP gross margin guidance at 75.0%, aligning with Street estimates. For the full fiscal year, Nvidia projects gross margins to remain in the mid-70% range, with a slight decrease anticipated in Q4 compared to the approximately 75% margin recorded in Q3.