Click here for the Day 2 results, from the official IRB website
After sweeping past England, France and Russia on the opening day, Sean Holley's side had no answer to Argentina and Australia.
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The inexperienced Wales side had a chance to advance to the Cup semi-finals, but found Argentina too tough in the quarter-final, losing 21-12.
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Jonathan Pritchard scored on the stroke of halftime to level the scores at 7-7, but the Pumas scored two second-half tries to seal the match, despite a late effort from Newport's Ben Breeze, who can't get a contract for the new Gwent region and could be lost to Welsh rugby after offers from England and Italy.
In the Plate semi-final, excellent tries to Kevin James and probably Wales' player of the tournament, Llanelli's Tal Selley, had the home side in the hunt at only 10-15 down, but two late tries to the Australians meant a 27-10 defeat.
Coach Holley praised his young side for their first-day efforts, in particular Selley.
"He's a star of the future - he was player of the tournament on the first day and we'll see a lot more of him in the next few years.
"Ben Breeze was excellent and Jason Forster came in and led the side really well. Young Andy Powell was loving it out there, and he's the sort of player that can grow through these Sevens tournaments.
"I thought the team did fantastically well given that we've had nine changes from the Hong Kong tournament and been together only six days.
"We beat England by playing some of the best Sevens seen at this tournament, and I'm pretty happy."
Wales earn four points from the Cardiff tournament, taking their series total to seven.
Results day 2
WALES 21-12 ARGENTINA
WALES 27-10 AUSTRALIA