Nvidia Posts Record Earnings, But China Struggles Cast a Shadow

Nvidia delivered another set of record-breaking results in its latest quarter, underscoring its dominance in the artificial intelligence boom. But despite soaring profits, challenges in China and softer-than-expected numbers in a key business segment left investors wary.

The chipmaker reported $46.7 billion in revenue for the second quarter, up 56% from a year ago, while net income surged 59% to $26.4 billion. The results topped Wall Street projections, cementing Nvidia’s role as the backbone of the AI revolution.

Data centre sales once again drove performance, pulling in $41.1 billion. Of that, Nvidia’s latest Blackwell generation of AI chips contributed $27 billion alone.

“Blackwell is the AI platform the world has been waiting for,” CEO Jensen Huang said. “The AI race is on, and Blackwell is the platform at its centre.”

Huang told analysts he expects AI infrastructure spending to balloon to between $3 trillion and $4 trillion by 2030, calling the forecast “fairly sensible for the next five years.”

Nvidia also spotlighted its role in OpenAI’s recent launch of the gpt-oss open-source models, saying its Blackwell GB200 NVL72 rack system processed 1.5 million tokens per second during the rollout.

Yet the upbeat earnings came with a caveat. Nvidia admitted it sold no units of its H20 chip in China last quarter, despite recent U.S. export licence approvals. Instead, $650 million worth of the devices went to a buyer outside the country.

The absence of shipments reflects a murky U.S. trade policy under President Donald Trump, which currently allows Nvidia to sell advanced GPUs to China if it pays a 15% export tax. Legal scholars have called the arrangement “an unconstitutional abuse of power.”

Nvidia’s Chief Financial Officer, Colette Kress, noted the company’s caution: “While a select number of our China-based customers have received licences over the past few weeks, we have not shipped any H20 devices based on those licences.”

Further complicating matters, Beijing has reportedly discouraged Chinese firms from using Nvidia chips—prompting the company to halt H20 production earlier this month.

Market Reaction

Looking ahead, Nvidia projected $54 billion in revenue for the third quarter, excluding any sales to China. The figure met Wall Street expectations but fell short of bullish forecasts that stretched above $60 billion.

Despite announcing a $60 billion stock buyback, Nvidia’s shares slipped about 3% in after-hours trading. Investors appeared disappointed by a slight miss in data centre sales—seen as a key indicator of the strength and sustainability of the AI boom.