Nvidia has a blowout quarter, but Wall Street wants more

Nvidia topped revenue and earnings expectations in its latest quarter, but the stock ticked downward in extended trading Wednesday as investors maintained high expectations for the AI darling.

Why it matters: The stock is widely considered a bellwether for the health of the broader AI economy, but lately it has been trailing the broader semiconductor sector in market gains.

Zoom in: Nvidia posted revenue of $96.2 billion, more than doubling its year-earlier showing, while net income jumped 126% to $59.7 billion.

• That exceeded S&P Capital IQ expectations of $92.1 billion in revenue and $51.2 billion in earnings for the period ended July 26.
• Revenue from data centers — Nvidia's largest source of sales — rose 117%, to $89 billion.
• The company projected revenue of $108 billion for its next reporting period, "plus or minus 2%." That would be the first time Nvidia has exceeded $100 billion in a quarter.

The impact: Nvidia shares fell slightly in after-hours trading.

• The stock recorded a seven-day losing streak through Monday, though its shares are still up 11% on the year.

The big picture: Nvidia's earnings report comes after a string of investments and capital maneuvers designed to boost the AI economy and bolster its customers base, including a recent deal to backstop an OpenAI data center.

• The investments have called attention to concerns about a circular financing risk in the AI economy, which CEO Jensen Huang has dismissed.
• "This time last year, one lab alone was driving the buildout; today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online — with strong momentum across the U.S. and around the world," Huang said Wednesday in a statement.
• "The AI infrastructure buildout is at full steam."