Nvidia stock slips 3.2% on China drag and data center revenue miss

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Nvidia stock slips

Highlights

• Nvidia beat Q2 earnings and revenue estimates, reporting $1.05 EPS on $46.7 billion in revenue.

• A slight miss in data center revenue ($41.1 billion vs. $41.3 billion expected) triggered a 3% drop in the stock.

• Strong Q3 guidance and a $60 billion buyback plan support a positive long-term outlook, though China-related sales restrictions continue to pose risks.

The stock is currently trading well above its 50-day simple moving average (SMA) of $172.70 and its 200-day SMA of $136.80, a classic bullish signal known as a "golden cross." This pattern confirms that the longer-term trend remains positive. Resistance is seen near $183.16—a level that NVDA briefly touched before retreating this week. The first notable support is around $172.00, aligned closely with the 50-day SMA. Should that level break, next support lies near the $160–$162 range.

Bollinger Bands remain wide, suggesting elevated volatility, but not to a destabilizing degree. The Relative Strength Index (RSI) remains below overbought territory, currently hovering around 58, giving Nvidia room to rally without being technically overheated. The Average Directional Index (ADX) also supports a strong trend, with values over 25, confirming momentum remains to the upside despite near-term losses.

Nvidia stock price dynamics (June 2025 - August 2025). Source: TradingView

Volume trends also support the broader bullish thesis. Although trading volume has tapered slightly compared to Nvidia’s recent peaks during its June rally, it remains above the stock’s 20-day average, indicating sustained institutional interest. Notably, accumulation/distribution indicators continue to trend higher, suggesting that recent pullbacks are being met with buying rather than panic selling. This underlying accumulation, particularly near key support zones, reinforces the view that Nvidia's current dip is more likely a consolidation phase rather than a reversal.

Earnings beat overshadowed by data center miss and China drag

Nvidia’s highly anticipated second-quarter earnings, released after the bell on Wednesday, delivered a solid headline beat, but a slight shortfall in data center revenue triggered a negative market reaction. The company reported adjusted earnings per share (EPS) of $1.05 on revenue of $46.7 billion, comfortably above analyst expectations of $1.01 EPS and $46.2 billion in revenue. However, investor sentiment soured after Nvidia’s data center revenue came in at $41.1 billion—just under the $41.3 billion Wall Street forecast. Shares dropped over 3% in after-hours trading as a result.

The data center segment—now the backbone of Nvidia’s growth story—grew sharply from $26.2 billion in the same quarter last year but still disappointed relative to high expectations. CFO Colette Kress attributed part of the shortfall to a $4 billion drop in sales of Nvidia’s lower-powered H20 chips, which were designed to comply with U.S. export restrictions to China. Importantly, those H20 revenues were not included in the Q2 numbers, nor in the company’s outlook, underscoring the growing impact of geopolitical constraints.

Despite this, Nvidia's Q3 guidance was robust. The company projected revenue of $54 billion, plus or minus 2%, slightly above consensus estimates of $53.4 billion. It also authorized a massive $60 billion in additional share buybacks, signaling confidence in its longer-term fundamentals. CEO Jensen Huang struck an optimistic tone, stating that production of next-generation Blackwell chips is ramping “at full speed” and that demand is “extraordinary.” He emphasized, “The AI race is on, and Blackwell is the platform at its center.”

Price outlook tilts positive amid guidance strength

Nvidia’s updated guidance and strong headline numbers support a cautiously bullish outlook in the near term, though volatility tied to China remains a key overhang. The company’s forecast for third-quarter revenue of $54 billion, slightly ahead of Wall Street’s $53.4 billion estimate, reflects ongoing strength in AI infrastructure demand—particularly from U.S.-based hyperscalers, which contributed approximately 50% of Nvidia’s Q2 data center revenue.

The stock's immediate pullback following the Q2 release—driven largely by the modest data center miss—suggests Nvidia may remain rangebound in the short term, consolidating between support near $172 and resistance at $183. A sustained break above $183 would open the path toward $190, especially if demand for Blackwell GPUs materializes more quickly than expected. Conversely, a drop below $172 on high volume would expose the stock to a deeper retracement into the $160–$165 range.

Ahead of its fiscal Q2 report, Nvidia’s rally was driven by investor optimism over strong expected results, with consensus projecting $0.99 EPS and $45.7 billion in revenue. Hitting or exceeding these figures would have confirmed continued record growth and reinforced Nvidia’s dominance in AI infrastructure.

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