SANTA CLARA, Calif. (Aug. 27, 2025) — Nvidia Corp. reported strong second-quarter earnings on Wednesday, topping Wall Street estimates on both revenue and profit, but a slight miss in its data center sales weighed on investor sentiment.
Earnings Results
The chipmaker posted revenue of $46.7 billion for the fiscal Q2 2026, up 56% year-over-year and above analyst expectations of $46.1 billion. Adjusted earnings per share came in at $1.05, also beating forecasts of $1.01.
Despite the beat, shares fell more than 3% in after-hours trading after Nvidia’s data center revenue — its most important segment — landed at $41.1 billion, just below analyst projections of $41.3 billion. The division was up 56% from a year earlier, with strong adoption of the company’s Blackwell AI platform.
CEO Jensen Huang said production of the Blackwell Ultra chips is “ramping at full speed” with demand he described as “extraordinary.”
Growth Beyond Chips
CFO Colette Kress said Nvidia is now producing about 1,000 AI-optimized racks per week, with output expected to accelerate through the third quarter. Networking revenue surged 98% year-over-year to a record $7.3 billion, while gaming hit a new high of $4.3 billion. Automotive sales also climbed 69% to $586 million.
Gross margin for the quarter was 72.7%, up from 61% a year ago but slightly lower than last quarter’s 75.7%.
Embed from Getty ImagesChina and Export Restrictions
Nvidia’s Q2 results did not include shipments of its lower-powered H20 AI chips to China, restricted under U.S. export controls. The company sold $180 million worth of H20 inventory outside of China instead.
Executives warned that geopolitical uncertainty continues to pressure forecasts. “If tensions subside, we anticipate $2 to $5 billion in H20 revenue in Q3,” Kress said.
The Trump administration recently replaced its ban on AI chip exports to China with a 15% government revenue share requirement on H20 sales, a rule Nvidia has not yet factored into guidance.
Looking Ahead
For the fiscal third quarter, Nvidia projected revenue of about $54 billion, beating Wall Street’s $53.4 billion estimate. The company also approved an additional $60 billion in stock buybacks.
While Nvidia dominates the AI chip market with over 90% share, its $4.4 trillion market valuation and reliance on a handful of cloud hyperscaler customers remain points of concern for investors.
Still, Huang said the long-term outlook is massive: “Over the next five years, we expect to scale into a $3 to $4 trillion AI infrastructure opportunity. The AI race is just beginning, and Blackwell is at its center.”
