Key Takeaways:
- Nvidia beats Wall Street expectations by reporting revenue of $46.74 billion and earnings per share (EPS) of $1.05.
- Nvidia confirmed that H20 chips were not shipped in Q2 and would not be included in the Q3 outlook.
- During the after-market hours trading, Nvidia shares rose nearly 3% and the company approved a massive $60 billion share repurchase program.
The world’s most valuable company by marketcap, Nvidia (NVDA), delivered second-quarter fiscal 2025 earnings that exceeded Wall Street expectations, but shares fell about 3% in after-hours trading on Wednesday as the company offered no clarity on future chip sales to China.
The AI chipmaker announced revenue of $46.74 billion, up 56% year on year, and adjusted profits per share (EPS) of $1.05, exceeding analyst expectations of approximately $46.2 billion in revenue and $1.02 EPS.
The business also projected Q3 revenue between $52.9 billion and $55.1 billion, slightly higher than the consensus estimate of $53.4 billion.
Also read: All Eyes on Nvidia, Why Q2 Earnings Could Make or Break AI Rally!
Geopolitical Risks Remain
The Q2 earnings report did not include the sale of H20 chip sales in China. This was confirmed by the CFO, Colette Kress, who said that due to the regulatory restrictions, the exclusion of H20 chips resulted in a loss of potential revenue worth billions of dollars from its Q3 outlook as well.
“We’re still waiting on several of the geopolitical issues going back and forth between the governments,” Kress said, estimating $2–5 billion worth of H20 shipments are ready once restrictions ease.
CEO Jensen Huang emphasized the strategic importance of China, calling it “the second-largest computing market in the world” and home to nearly half of the world’s AI researchers. He said Nvidia continues to advocate for U.S. firms’ access to the region.
Analyst Comments
The investment banking group, Jefferies, increased its price objective for Nvidia to $205.00 from $200.00 on Thursday. According to the analyst at Jefferies, demand remains robust for Nvidia’s products.
Moreover, an analyst at Wedbush Securities, Dan Ives, said this on the Q2 earnings report,
The Godfather of AI Jensen and Nvidia delivered another robust quarter… beating Street estimates on both revenue and earnings while also offering stronger guidance than expected.
Despite the restrictions on H20 chip sales in China, which could have added approximately $4 billion in revenue according to the analyst, Ives mentioned that Nvidia has still managed to beat Wall Street expectations.
Why Did Nvidia Fall?
The company expects $3–4 trillion in AI infrastructure spending by 2030, a trend driven by Big Tech hyperscalers including, Microsoft, Amazon, Meta, and Alphabet, who have collectively budgeted more than $325 billion in AI capex this year.
Meanwhile, Nvidia continues to expand its product roadmap, with Huang teasing the upcoming Rubin architecture, due in 2026, and reiterating strong momentum for its Blackwell Ultra chips.
The data center segment remains the company’s largest revenue driver, generating $41.1 billion in revenue, up 56% year-over-year (YoY). However, the stock decreased by nearly 3% during the after-market hours trading. The reasons for this price reaction were due to different factors.
Firstly, even though the data center revenue grew by 56% YoY, the market had more elevated expectations with respect to its data center segment. Secondly, the company confirmed that it had not sold H20 chips to China during Q2 and has been excluded from sales from its Q3 outlook as well.
At the same time, Nvidia boosted shareholder returns, buying back $9.7 billion worth of stock and issuing $244 million in dividends during the quarter. Its board also approved a massive $60 billion share repurchase program with no set end date.
