Nvidia once again delivered strong quarterly results, surpassing Wall Street estimates on both revenue and earnings, and projecting sales growth above 50% for the current quarter. Yet, despite the upbeat outlook, the stock fell in after-hours trading as data center revenue failed to meet analyst forecasts for the second consecutive period.
Earnings snapshot
Here’s how Nvidia performed against LSEG consensus estimates:
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Earnings per share (adjusted): $1.05 vs. $1.01 expected
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Revenue: $46.74 billion vs. $46.06 billion expected
Looking ahead, Nvidia expects Q3 revenue of $54 billion ±2%, topping the $53.1 billion anticipated by analysts. The company noted that this forecast does not yet include potential H20 chip shipments to China.
AI boom powers growth, but momentum slows
Second-quarter revenue surged 56% year-over-year to $46.74 billion, marking the ninth consecutive quarter of growth above 50%. However, it was also the slowest pace since mid-2023, underscoring signs of moderation in the AI-fueled rally.
Colette Kress, Nvidia’s CFO, emphasized the scale of the AI opportunity, telling analysts the company sees between $3 trillion and $4 trillion in AI infrastructure investment globally by the end of the decade.
Data center revenue, the cornerstone of Nvidia’s growth, rose 56% to $41.1 billion, slightly missing StreetAccount’s $41.34 billion estimate. Of this, $33.8 billion came from GPUs, down 1% from the prior quarter due to a $4 billion shortfall in H20 chip sales. Meanwhile, networking products nearly doubled year-over-year to $7.3 billion, reflecting strong demand for system-scale AI buildouts.
China headwinds and H20 uncertainty
Nvidia confirmed it shipped no H20 processors to China during the quarter, following U.S. export restrictions. The company previously acknowledged a $4.5 billion writedown linked to the chip, which could have added up to $8 billion in sales had shipments proceeded.
Still, Nvidia unlocked $180 million of H20 inventory with a customer outside China and suggested it could generate $2–5 billion in H20 revenue next quarter if geopolitical conditions allow.
Broad-based demand, led by Blackwell
Large cloud providers—including Microsoft, Amazon, Alphabet, and Meta—continue to drive Nvidia’s momentum. The company reported a 17% quarter-over-quarter increase in Blackwell chip sales, with the new lineup reaching $27 billion in revenue and now representing around 70% of total data center sales.
Beyond AI infrastructure, Nvidia’s gaming division generated $4.3 billion in revenue, up 49% year-on-year, while the robotics segment grew 69% to $586 million, though it remains a small part of the business.
Profit surge and capital return
Net income climbed 59% to $26.42 billion, or $1.05 per share, compared with $16.6 billion, or $0.67 per share, a year earlier.
In a move welcomed by investors, Nvidia’s board authorized an additional $60 billion in share buybacks, with no set expiration. The company repurchased $9.7 billion worth of stock during the quarter.
Market reaction
Despite stellar results, Nvidia’s shares slipped in extended trading, highlighting investor concerns over slower growth in data center revenues—the division most critical to sustaining the AI boom. Analysts note that while Nvidia remains the undisputed leader in AI hardware, questions around China exports and moderating growth may keep volatility elevated.
