AI·With on edge over AI bubble fears, chip stocks shudder as investors send Nvidia down 3% despite 56% growth in data center revenueBy Nick LichtenbergBy Nick LichtenbergFortune Intelligence EditorNick LichtenbergFortune Intelligence EditorNick Lichtenberg is Fortune Intelligence editor and was formerly Fortune's executive editor of global news.SEE FULL BIO Nvidia CEO Jensen Huang.Chip Somodevilla/Getty ImagesNvidia posted record results for the second quarter of 2025, exceeding analysts’ expectations on both revenue and fit, yet s slipped modestly in after-hours trading as its crucial data center division narrowly missed Wall Street forecasts.
Nvidia reported revenue of $46.7 billion for the second quarter, marking a 56% increase compared to the same period last year. Adjusted earnings per reached $1.05, beating analyst estimates by $0.04.
Investors had extremely high expectations for Nvidia’s data center division, with forecasts set at $41.3 billion.
The reported figure was $41.1 billion, a 56% increase year-over-year but just below consensus, raising concerns whether the pace of AI-driven growth is peaking or facing headwinds, leading to a roughly 3% drop in s after the report.
Investors could also be reacting to the fact that Nvidia’s sales gain was the smallest percentage in over two years and the forecast showed that it continues to expect a slowdown in growth.
Market context & AI impact Nvidia remains the world’s most valuable company, with a market capitalization above $4 trillion, reflecting investor optimism its dominant role in AI infrastructure.
giants including Microsoft, Meta, Amazon, and Alphabet continue to invest heavily in Nvidia-powered data centers, sustaining high demand for its graphics cessing units (GPUs).
The company’s Blackwell chip line remains in high demand, though CEO Jensen Huang acknowledged duction capacity constraints rather than lack of customer interest.
Nvidia jected third-quarter revenue of $54 billion, plus or minus 2%, not assuming any future sales of its H20 AI chips to China, which have been affected by recent export restrictions and U.S.
policy shifts. The company also announced an aggressive $60 billion stock repurchase gram, underscoring management’s confidence in continued growth and cash generation.
Jittery Nvidia remains the top-performing stock among mega-cap nology names in 2025, rising over 30% year-to-date.
Most Wall Street analysts maintain a buy rating, citing Nvidia’s outsized of the fast-growing AI chip market and confidence in its next-generation duct launches.
The market is slightly on edge due to increasing talk of an AI bubble, including from the mouth of OpenAI CEO Sam Altman himself.
A report in The New York Times suggested that Meta may be restructuring its superintelligence division and a widely read MIT report found that 95% of generative AI pilots in the corporate sector were failing, with zero return on investment.
The resulting sell-off wiped out Palantir’s gains in the weeks since its own blowout earnings report.
In reaction to the Nvidia earnings, several chip stocks traded down after-market on Wednesday, including Advanced Micro Devices dropping 1.3%, Micron nology falling 1%, Taiwan Semiconductor Manufacturing shedding 1.7%, Broadcom dropping 1.2%, and Intel slipping 0.3%.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
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