Catastrophe canceled

#SP500

Key zone: 6,400 - 6,450

Buy: 6,500 (on a pullback after a correction to 6,450); target 6,600-6,650; StopLoss 6,430

Sell: 6,400 (on strong negative fundamentals); target 6,250-6,200; StopLoss 6,470

The world’s most valuable public company continues to benefit from the AI boom. However, after a series of outstanding quarters, the fresh revenue forecast was seen as not impressive enough. Fears emerged in the market that demand for AI chips may stabilize earlier than expected and under less favorable conditions.

Nvidia’s financial results for Q2 2025:

• Total revenue: $46.7B (in line with forecasts).
• Data center revenue: $41.1B (+56%), below expectations of $41.3B.
• Net profit: $26.4B (+59% y/y).

For Q3 the company projects revenue of about $54B — slightly above Wall Street consensus.

Nvidia stock fell nearly 3% in after-hours trading due to weaker-than-expected performance in the data center segment. This business, accounting for 89% of sales, has now missed forecasts for the second consecutive quarter.

Nevertheless, CEO Jensen Huang is confident that AI-sector companies will spend $3–4T over the next five years, and Nvidia can capture up to 70% of that amount.

Since April Nvidia stock has nearly doubled after dropping below $95 (year’s low). At that time the company was hit by the Trump administration’s ban on sales of H20 chips to Chinese clients. Lower data center revenue is partly linked to a $4B decline in H20 sales.

After Huang’s visit to the White House and his promise to give the federal government 15% of revenue from AI chip sales in China, shipments resumed, though business prospects in the region remain uncertain.

To stabilize market sentiment Nvidia announced a record $60B share buyback program (vs. $50B previously). For a company with $4.4T capitalization, this is a massive step: capitalization is an estimated, empirical figure, not the same as “real money.” But buying back shares at current market prices requires real funds. This factor caused selling pressure in after-hours trading.

The crypto market reacted positively to the buyback news: despite the decline in the S&P 500, leading tokens showed attempts at growth.

Nvidia promises to focus on improving data center efficiency. Despite fluctuations in reporting dynamics and local risks, nothing (and no one) threatens the company’s leading position in the AI segment.

So we act wisely and avoid unnecessary risks.

Profits to y’all!