TLDR
- Nvidia beat earnings expectations with $1.05 per share vs $1.01 expected and revenue of $46.74 billion vs $46.06 billion estimated
- Data center revenue of $41.1 billion missed estimates of $41.34 billion, causing stock to fall 2% in premarket trading
- Company sold zero H20 chips to China during the quarter due to U.S. restrictions, but guided for potential $2-5 billion in H20 sales if geopolitical issues resolve
- Q3 revenue guidance of $54 billion beat analyst expectations of $53.1 billion, excluding any potential China H20 sales
- Blackwell chip sales rose 17% quarter-over-quarter and remain sold out according to analysts
Nvidia delivered another quarter of strong financial results but investors focused on what the company couldn’t deliver rather than what it achieved. The chipmaker’s stock dropped 2% in premarket trading despite beating both earnings and revenue expectations.
The company reported adjusted earnings of $1.05 per share, topping the $1.01 analyst consensus. Revenue came in at $46.74 billion, beating estimates of $46.06 billion.
But the headline number that caught Wall Street’s attention was data center revenue. The division generated $41.1 billion, falling just short of the $41.34 billion analysts expected.
NVIDIA, $NVDA, Q2-26. Results:
📊 Adj. EPS: $1.05 🟢
💰 Revenue: $46.7B 🟢
📈 Net Income: $26.4B
🔎 Blackwell platform demand surges as AI infrastructure ramps up globally. pic.twitter.com/dizlcuV3J5— EarningsTime (@Earnings_Time) August 27, 2025
This marks the second consecutive quarter where Nvidia’s most important business segment has missed revenue expectations. The shortfall stems largely from the company’s inability to sell its H20 chips to Chinese customers.
Zero China Sales Despite Approval
Nvidia sold exactly zero H20 processors to China-based customers during the quarter. This came after the Trump administration restricted these sales in April, only granting approval in late July.
CFO Colette Kress revealed that despite receiving U.S. government approval, the company hasn’t shipped any H20 chips to China in the current quarter either. Several China-based customers have received licenses over recent weeks, but no shipments have occurred.
The company did benefit from releasing $180 million worth of H20 inventory to a customer outside of China. This provided some relief but hardly offset the potential revenue loss.
Kress estimated that if geopolitical tensions ease, Nvidia could generate between $2 billion and $5 billion in H20 revenue during the third quarter. CEO Jensen Huang described the Chinese market as representing at least a “$50 billion opportunity” if the company could address it with competitive products.
The uncertainty extends beyond current restrictions. Kress noted that Nvidia hasn’t received official confirmation about reports that the U.S. government plans to take 15% of revenue from H20 sales to China.
Blackwell Momentum Continues
Despite China headwinds, Nvidia’s next-generation Blackwell chips showed strong performance. Sales rose 17% from the first quarter, with the product line accounting for about 70% of data center revenue.
Analysts from Jefferies described demand signals as “rock solid” with both Hopper and Blackwell chips “sold out across the board.” The Blackwell Ultra ramp is progressing well, easing earlier supply chain concerns.
The company’s guidance for the third quarter came in at $54 billion, plus or minus 2%. This beat analyst expectations of $53.1 billion and notably excludes any potential H20 sales to China.
Piper Sandler analyst Harsh Kumar called the guidance “impressive” precisely because it contains no H20 revenue assumptions. This creates potential upside if China restrictions ease.
Overall company revenue jumped 56% year-over-year from $30.04 billion. This marks the ninth consecutive quarter of revenue growth exceeding 50%, though it represents the slowest growth rate during that streak.
Net income increased 59% to $26.42 billion, or $1.05 per share, compared to $16.6 billion in the same period last year. The company’s gaming division also showed strength, generating $4.3 billion in sales, up 49% year-over-year.
Nvidia’s board approved an additional $60 billion in share repurchases with no expiration date. The company bought back $9.7 billion of its own stock during the quarter.
Kress projects between $3 trillion and $4 trillion in AI infrastructure spending by the decade’s end. Huang dismissed concerns about AI profitability raised in recent MIT research, stating that spending by major cloud providers will likely sustain chip demand long-term.
The robotics division generated $586 million in sales during the quarter, representing 69% annual growth but remaining a small portion of overall business.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
