Highlights;
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Earnings Beat Expectations: Nvidia reported better-than-expected earnings per share (EPS) of $1.05 and revenue of $46.74 billion, with a strong quarterly sales growth forecast above 50%. Despite this, shares dipped due to data center revenue missing estimates for the second consecutive period.
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Data Center Growth and AI Outlook: The data center segment grew 56% year-over-year to $41.1 billion, fueling Nvidia’s performance. The company anticipates $3 trillion to $4 trillion in AI infrastructure spending by the decade’s end, highlighting robust long-term prospects.
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H20 Chip Challenges and Recovery: The H20 chip issue caused a $4.5 billion write-down, impacting second-quarter sales. However, Nvidia released $180 million in H20 inventory elsewhere and projects potential future revenue of $2 billion to $5 billion contingent on geopolitical factors.
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Diverse Growth and Share Buybacks: Gaming revenue rose 49% to $4.3 billion, and the robotics segment grew 69% to $586 million. Additionally, Nvidia announced an incremental $60 billion share repurchase program, demonstrating confidence and liquidity.
Nvidia’s CEO, Jensen Huang, attended the “Winning the AI Race” Summit in Washington, D.C., on July 23, 2025. (Kent Nishimura | Reuters)
Nvidia Beats Expectations with Strong Earnings and Revenue, Signals Continued AI Demand
Nvidia reported stronger-than-expected earnings and revenue on Wednesday, with sales growth for the quarter expected to remain above 50%. This indicates to Wall Street that demand for artificial intelligence infrastructure remains robust. Despite this, the stock dipped in aftermarket trading as data center revenue fell short of estimates for the second consecutive period. However, shares rebounded on Thursday.
Key Financial Highlights:
- Earnings per share: $1.05 (adjusted) vs. $1.01 (estimated)
- Revenue: $46.74 billion vs. $46.06 billion (estimated)
Nvidia has projected revenue of $54 billion for the current quarter, with a 2% margin of error, though this figure does not account for any potential H20 shipments to China. Analysts had anticipated $53.1 billion in revenue, according to LSEG.
The company’s second-quarter results underscore the dominance of its data center business in the global AI expansion. During an earnings call, Nvidia’s CFO, Colette Kress, highlighted expectations of $3 trillion to $4 trillion in AI infrastructure spending by the end of the decade.
Revenue Growth and AI Impact
- Overall company revenue rose 56% year-over-year, reaching $46.74 billion, up from $30.04 billion in the same quarter last year.
- This marks the ninth consecutive quarter of revenue growth exceeding 50%, dating back to mid-2023 when the generative AI boom began to significantly impact Nvidia’s results. However, this quarter saw the slowest growth during that period.
Nvidia’s data center business, centered around GPUs and complementary products, generated $41.1 billion in revenue, slightly below the StreetAccount estimate of $41.34 billion.
H20 Chip Situation
- Nvidia did not sell any H20 chips to China during the quarter but benefited from the release of $180 million worth of H20 inventory to a customer outside China. Kress noted that Nvidia could generate between $2 billion and $5 billion in H20 revenue this quarter if geopolitical conditions allow.
Net Income and Profit
- Net income increased 59% to $26.42 billion, or $1.08 per share, up from $16.6 billion, or 67 cents per share, in the prior year.
Breakdown of Data Center Sales
- $33.8 billion of Nvidia’s data center sales were for “compute” (GPU chips), a 1% decline from the previous quarter due to $4 billion less in H20 sales.
- $7.3 billion of data center sales came from networking components, nearly double the year-ago period.
Other Business Segments
- Gaming Division: Reported $4.3 billion in sales, up 49% year-over-year. Nvidia announced that its gaming GPUs will be optimized to run certain OpenAI models on personal computers.
- Robotics Division: Generated $586 million in sales, representing 69% annual growth, though it remains a smaller part of the business.
Share Repurchases
- Nvidia’s board approved an additional $60 billion in share buybacks, with no expiration date. The company repurchased $9.7 billion of its stock during the quarter.
Correction: An earlier version of this report incorrectly stated the net income per share for the fiscal second quarter. The correct figure is $1.08 per share.
Source: https://www.cnbc.com/2025/08/27/nvidia-nvda-earnings-report-q2-2026.html
