Two months after Pacific Crest downgraded Nvidia stock, the company made a U-turn and. The opportunity around cryptocurrency has caused some analysts to become more optimistic about Nvidia. Last month Canaccord Genuity raised its estimates for Nvidia 'yet again' as it sees continuing strength in the gaming and automotive markets. Sentiment around Nvidia has continued to be generally positive since then.

Nvidia's gaming revenue - the biggest contributor to the company's top line - was up 52 percent year over year, and it beat analysts' estimates, according to StreetAccount. Indeed, sales in the Datacenter segment ended up below the FactSet analyst estimate, according to StreetAccount. That - and selling on the news - could explain the stock drop despite the earnings beat, Patrick Moorhead of Moor Insights & Strategy told CNBC. Revenue was up 56 percent year over year, with the company's Datacenter revenue - including sales of GPUs to public cloud providers like Amazon Web Services - leading the way at 175 percent revenue growth, even though it was up just 2 percent sequentially.

Ahead of earnings on Thursday Nvidia stock closed down more than 4 percent. In May after the company released its earnings results for the previous quarter, beating estimates on both EPS and revenue. Strong reactions to earnings results are not unusual for Nvidia, which is popular with investors these days as the company has emphasized the importance of its graphics processing units for artificial intelligence.

Nvda earnings report q2 2018