NVDA Guides 94% Q2 Growth but Slides 2.5% as China Exclusion Clouds $91B Target

Nvidia delivered textbook earnings on the surface. Revenue of $81.6B exceeded consensus, data center sales doubled year-over-year to $75.2B, and the company authorized an $80B share buybackA company repurchasing its own shares from the open market. and announced dividend increases. Management guided Q2 revenue to $91B, implying 94% growth. By every traditional metric, the Blackwell GPU transition is firing on all cylinders, with contracted capacity at upstream suppliers now more valuable as older H100 rental prices climbed 20% despite being three generations old.

Yet the stock refused to celebrate. Post-earnings volatility saw shares slide into the close, and early commentary from traders and analysts pointed to a crowded narrative: the bar had gotten too high. Investors parsed the earnings release line-by-line, noting that Q2 guidanceCompany-issued forecasts of future financial performance. explicitly excludes China data center compute entirely, a material caveat that frames the $91B print as a ceiling rather than a floor estimate given geopolitical uncertainty. Some observers highlighted that gross margins, despite being robust, are not expanding as dramatically as prior cycles, suggesting pricing power may be limited by the sheer abundance of competing GPU supply from AMD and others.

The broader macro backdrop added pressure. US Treasury yields climbed sharply as markets repriced the odds of Fed rate cuts downward; bond yields hit their highest level since 2007, with markets pricing 37% odds of a Fed hike in 2026. Energy prices surged on the Iran-US standoff. Nvidia's own guidanceCompany-issued forecasts of future financial performance. footnotes and the absence of a China revenue line threw water on the euphoria that usually accompanies a beat of this magnitude. Market participants grappled with whether hyperscaler capex budgets can continue absorbing higher funding costs if rates stay elevated, a structural question that transcends any single quarter of chip sales.

The sell-off underscores a central tension in the AI rally: NVIDIA remains the benchmark for infrastructure sentiment, but valuation and cyclicality have become the real debate. At a trailing P/E near 20x on forward guidanceCompany-issued forecasts of future financial performance., the stock is no longer trading on pure growth momentumThe empirical fact that winners keep winning over the medium term.. Sentiment shifted from 'buy every dip' to 'take profits into strength,' a rotation that will reverberate through the entire semiconductor and data center supply chain in coming quarters.