Nvidia Corporation (Nasdaq: NVDA ) investors aren’t used to disappointing earnings reports. However, NVDA stock dropped 4 percent Friday morning after a guidance miss on Thursday afternoon, but analysts say there’s still plenty to love about Nvidia.

NVDA earnings by the numbers. Nvidia reported second-quarter adjusted earnings per share of $1.76 on revenue of $3.12 billion. Both numbers topped consensus expectations of $1.66 and $3.10 billion, respectively. Revenue was up 40 percent from a year ago.

Gross margin in the second quarter was 63.5 percent, down from 64.7 percent in the first quarter.

[See: Artificial Intelligence Stocks: The 10 Best AI Companies .]

By segment, NVDA reported gaming revenue of $1.80 billion, ahead of analyst expectations of $1.75 billion. Data center revenue was $760 million compared to analyst expectations of $744 million. Professional visualization revenue was $281 million, above the $257 million consensus forecast. Nvidia’s automotive segment generated $161 million in revenue, above the $148 million consensus estimate.

The only major weakness in the quarter came from original equipment manufacturers and intellectual property, which includes Nvidia’s cryptocurrency mining products. Revenue was down 70 percent from a year ago to $116 million, well short of consensus estimates of $188 million.

“Growth across every platform – AI, gaming, professional visualization, self-driving cars – drove another great quarter,” CEO Jensen Huang says in a statement.

Despite another impressive quarter of growth from NVDA , the company’s guidance came up a bit short of lofty expectations. Nvidia guided for $3.25 billion in revenue in the third quarter, missing consensus analyst forecasts of $3.34 billion. Nvidia also guided for gross margin of between 62.3 percent and 63.3 percent in the third quarter.

Earlier this week, Nvidia announced its new Turing graphics processing units, which will be the world’s first ray-tracing GPUs. Huang says Turing is “the greatest advance for computing” in more than a decade.

Oppenheimer analyst Rick Schafer says long-term investors should shake off the guidance miss and buy the stock ahead of the Turing launch later this year.

“We see significant pent-up demand for Turing and believe estimates have reset for upside as volumes ramp,” Schafer says.

[See: 7 of the Best Stocks to Buy for 2018 .]

Oppenheimer has an “outperform” rating and $310 price target for NVDA stock .

Compare Offers

Compare Offers