Stock traders were fully focused on Nvidia’s earnings report, and thankfully, it came out solid enough to ease a big risk for the markets. A weak earnings release or conservative forecast could have triggered a broad selloff across multiple sectors and even spilled into global markets due to correlations. Because of this, the report carried unusually high importance. 

Nvidia’s second-quarter EPS came in at $1.05, above expectations of $1.01, marking 9.38% quarterly growth. Revenue rose 6.08% quarter over quarter to $46.74 billion, 1.11% above consensus. However, two areas disappointed: operating expenses and data center revenue, the latter growing 5.07% on the quarter but still below forecasts. 

One of the main focal points for traders and investors was Nvidia’s H20 chips. After negotiating with the US government, new challenges have emerged in China, where sales dropped sharply and management excluded China from its guidance altogether. This is a clear negative for the stock. 

(Nvidia EPS and Data Center Revenue QoQ Growth) 

Despite this, Nvidia projects $3–$4 trillion in AI sector infrastructure spending by the end of the decade. While the era of triple-digit growth has ended, AI’s potential remains massive. EPS growth is expected to return to double digits in the next two quarters, with data center revenue following the same path. To reinforce its confidence, Nvidia announced a $60 billion buyback program. 

(Nvidia Forward P/E Ratio) 

Markets had already priced in the slowdown from “insane growth” to more sustainable levels. The forward P/E ratio has been trending downward, moving toward more realistic valuations even as NVDA retains upward momentum. With 2025 marking the end of its logarithmic uptrend, a new period has begun: one where impressive returns are still possible but not comparable to the explosive 2023–2024 run. Traders are also more cautious toward high valuations, and corrections are deeper. For example, the forward P/E is nearing the upper line of its valuation channel at 43, could be a warning signal for Nvidia bulls. 

(NVDA) 

Post-earnings, NVDA is down 2% in early trade. The 34-day EMA near 174 is an important short-term support. If it holds, the negative effects of weaker data center revenue and H20 chip concerns may be absorbed. If it breaks, a correction could develop, especially as both NVDA and the broader market look stretched in valuation. The relative momentum index also suggests caution. 

If a downward move occurs, Fibonacci retracement levels can be tracked as potential supports, especially the 38.2% level. Bulls should also watch the previous top: a breakout and sustained move above it would be a strong bullish signal. Still, even if a correction comes, it could be a positive. Given Nvidia’s long-term potential, pullbacks may offer attractive buying opportunities.