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as nvidia released its q2 earnings report, investors began selling technology stocks, chip stocks and ai concept stocks, causing u.s. stocks to fall across the board on wednesday.

in addition, while the market is dealing with concerns that the u.s. economy may fall into recession, it is also closely watching whether the federal reserve can quickly cut interest rates to achieve a soft landing. currently, the money market expects the fed to cut interest rates by about 100 basis points this year, possibly starting as early as september.

blackrock, a global asset management giant, said the overall u.s. economy may slow down but will not fall into recession. blackrock pointed out that despite the risk of recession, the u.s. economy has shown resilience, especially after the earnings reports of technology companies performed better than expected, and they are optimistic about the u.s. economy. according to blackrock data, technology companies' earnings growth in the second quarter reached 20%, while non-tech companies' earnings growth was 5%, which was higher than the 18% and 2% respectively expected at the beginning of the earnings season.

in addition, blackrock also mentioned that the latest initial jobless claims, the ism service industry index, and the federal reserve's bank loan survey all indicate that the u.s. economy is experiencing a slowdown, but is not heading for a recession. blackrock believes that the market may experience small fluctuations against the backdrop of relatively light trading volumes in the summer.however, they remain overweight on japanese and u.s. stocks and are bullish on the artificial intelligence theme in the united states.

as of the close, the dow jones industrial average fell 0.39%; the nasdaq fell 1.12%; and the s&p 500 fell 0.60%.

nvidia earnings report

after the financial report was released, nvidia's stock price fluctuated sharply after the market, first rising by more than 2%, and then quickly diving, with the after-hours decline once exceeding 7%.

the main reason for the stock price decline is that although second-quarter earnings per share and revenue both exceeded expectations, the revenue growth guidance for the third quarter slowed significantly.

nvidia's revenue hit a new high in the second quarter, but the revenue growth rate in the third quarter is expected to be as high as 83%.this is the first time in six quarters that the rate has been below 100%., stronger than the wall street average expectation, but fell short of the highest optimistic expectations of triple-digit growth.(revenue will be around $32.5 billion. analysts’ average forecast for nvidia’s third-quarter revenue was $31.9 billion, but the highest forecast was $37.9 billion. it exceeded the average but not the highest.)

however, the blackwell architecture chip, an advanced chip that has attracted much attention due to rumors of delayed shipment,nvidia expects blackwell chips to generate billions of dollars in revenue in q4 and will start mass production in the fourth quarter as planned. at the same time, the demand for liquid cooling is very considerable. it also announced a new repurchase plan of $50 billion.

key financial data:

1. main financial data:

operating income: q2 revenue was $30 billion, up 122% year-on-year, exceeding expectations of $28.86 billion and higher than nvidia's own guidance ($27.44 billion - $28.56 billion). the previous quarter saw a year-on-year increase of 262%.

earnings per share (eps): eps was $0.68 (non-gaap), up 152% year-over-year and exceeding the expected $0.64. it was up 461% year-over-year in the previous quarter.

gross profit margin: q2 gross profit margin was 75.7%, up 4.5 percentage points year-on-year and 3.2 percentage points quarter-on-quarter. analysts expected 75.5%, and the company guided for 75%-76%. the gross profit margin in the previous quarter was 78.9%, up 12.1 percentage points year-on-year.

2. segment business data:

data center: q2 data center revenue was $26.3 billion, up 154% year-over-year, higher than the expected $25.1 billion. the year-over-year growth in the previous quarter was 427%.

gaming and ai pc: q2 revenue was $2.9 billion, up 16% year-on-year and 18% year-on-year in the previous quarter.

professional visualization: q2 revenue was $454 million, up 20% year-over-year and up 45% year-over-year in the previous quarter.

automobiles and robotics: q2 revenue was $346 million, up 37% year-on-year and up 11% year-on-year in the previous quarter.

3. performance guidance:

revenue: q3 revenue is expected to be $32.5 billion, with a fluctuation of 2%, that is, $31.85 billion to $33.15 billion. the average analyst expectation is $31.9 billion, and the highest is $37.9 billion.

gross profit margin: under non-gaap terms, q3 gross profit margin is expected to be 75%, with a fluctuation of 50 basis points, that is, 74.5%-75.5%.

4. dividends and repurchases:

in the first half of fiscal 2025, the company returned a total of $15.4 billion to shareholders through stock repurchases and cash dividends.

as of the end of q2, the company had $7.5 billion in remaining stock repurchase authorization.

on august 26, 2024, the company's board of directors approved a new $50 billion stock repurchase program with no expiration date.

according to the financial report data, nvidia once again exceeded wall street's expectations in q2, with revenue hitting a new quarterly high, exceeding the company's previously provided guidance range, and achieving triple-digit growth for the fifth consecutive quarter. although the strong demand brought by the ai ​​boom has driven the growth of the data center business, the growth rate has slowed significantly compared with the previous quarter, but it still maintained a triple-digit growth rate.

market commentators generally believe that the future trend of nvidia's stock price may be more affected by its third-quarter performance guidance.

according to the company's performance guidance, revenue in the third quarter is expected to grow by 75.8% to 82.9% year-on-year, while jpmorgan chase expects it to be us$32.5 billion, with a growth rate of 81.8%.

on the other hand, analysts' highest revenue growth forecast is 109.2%, which means that nvidia's q3 revenue growth forecast will fall back to double digits for the first time in the past six quarters, while wall street remains optimistic about triple-digit growth.

buffett celebrates his 94th birthday, berkshire's market value exceeds one trillion

berkshire hathaway inc. surpassed $1 trillion in market value for the first time on wednesday, becoming the first non-tech company in the u.s. to reach that milestone, an achievement that comes as chairman warren buffett is giving him an early birthday present on the eve of his 94th birthday.

since buffett took over the company in 1965, berkshire hathaway's market value has grown from about $25 million to $1 trillion today. at the close of wednesday, berkshire class a shares were at $696,502, up 0.8%; class b shares were at $464.59, up 0.9%. compared to the price of class a shares of about $20 when buffett took over, the current increase is huge.

berkshire hathaway has successfully transformed from a textile manufacturer in the 19th century to an insurance giant, and its stock price has risen 28% this year, outperforming the s&p 500 by about 10 percentage points. buffett holds about 15% of the company's shares, with a market value of $145 billion.