Nvidia is on fire, reporting a blockbuster second-quarter with $46.7 billion in revenue, beating analysts' predictions of $46 billion. That’s a 6% jump from the prior quarter and a massive 56% increase compared to last year. Net income soared to $26.4 billion, or $1.08 per diluted share, while adjusted earnings came in at $1.05, slightly ahead of the $1.02 consensus. It’s clear: Nvidia's the undisputed king of AI semiconductors.
Data Centers Keep the Cash Flowing
The real MVP here is Nvidia’s data center business, which made up a whopping 88% of total revenue. Sales hit $41.1 billion, thanks to a solid 17% sequential gain in Blackwell chip shipments. For all the hype around AI, this sector is clearly the cash cow keeping Nvidia’s engine running.
But China’s Missing from the Party
Here’s the twist, Nvidia confirmed it didn’t sell a single H20 chip to China during the quarter. Why? Geopolitical tensions and export restrictions. This revelation caused a 3.4% drop in Nvidia’s share price during after-hours trading, closing at $176. The company also had to shuffle $650 million worth of H20 chips originally destined for China to other non-restricted customers. Oh, and they unlocked a $180 million inventory reserve in the process.
Investors Get Nervous Amid Regulatory Concerns
Despite all the strong numbers, investors aren’t all smiles. Nvidia’s stock didn’t exactly soar after the earnings report, thanks to worries over tightening U.S. export rules. The U.S. government is limiting access to high-performance semiconductors for China, mainly to curb military and surveillance advances. Nvidia’s CEO, Jensen Huang, remains optimistic about the company’s AI future, calling Blackwell "the AI platform the world has been waiting for." But with trade uncertainty on the horizon, investors are getting jittery.
Looking ahead, Nvidia is projecting Q3 revenue of $54 billion and gross margins of 73.5%. Plus, they’re sweetening the deal with a $60 billion share repurchase program and a $0.01 dividend for October 2. Sounds like they’re not too worried, but will the market agree?
Anastasiia G
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