So, let’s talk about some earnings.
Nvidia’s recent earnings report indicates strong demand for AI-related chips, with revenue doubling to $30 billion and net profit rising to $16.6 billion. Despite Nvidia’s impressive revenue growth of 122% year-on-year and a net income increase of 168%, its stock fell by 6% following the earnings announcement, as concerns about slowing growth emerged. The company continues to perform well across all sectors and expects future revenue to reach approximately $32.5 billion, but faces challenges including delays in next-generation chips and an investigation by the US Department of Justice regarding competition practices.
Dell’s Q2 2025 earnings report showed a significant 80% increase in server sales, driven by demand for AI-oriented servers, particularly those using Nvidia chips. Revenue reached $25.03 billion, surpassing expectations, with net income rising 85% to $841 million. Despite a strong performance in the Infrastructure Solutions Group, which saw overall sales rise 38%, the Client Solutions Group experienced a decline in revenue. Dell revised its full-year revenue guidance to between $95.5 billion and $98.5 billion.
CrowdStrike reported a significant financial impact from a recent global IT outage caused by a sensor update, expecting a loss of about $60 million in annual recurring and subscription revenue. Despite this, CEO George Kurtz emphasized customer loyalty and trust, countering claims of defections to competitors. The company experienced a 451% increase in net income year-over-year but has lowered its revenue and profit forecasts for fiscal year 2025 due to the incident’s ongoing effects.
Why do we care?
If you sprinkle a little AI pixie dust over most things, investors and Wall Street will reward you. Now, that’s not true when it comes to Main Street, as we’ve seen data that shows the mention of AI drives down the value. So pair them.
As an IT services firm, you should be focusing on business outcomes. With AI inside you will delvier solutions that benefit the business (be it revenue increasing or cost savings), and lean into the business side and away from how it works.
Let’s note two things – it does seem that CrowdStrike will take a revenue hit. And second, it’s slowdown will be from an astronomical 451%, so it remains to be seen how long term the dip will be.