NVIDIA, the world’s most valuable semiconductor company, announced its second-quarter earnings for fiscal year 2026, exceeding Wall Street expectations. Although the company faced an $8 billion revenue loss due to China’s export restrictions, it still reported robust growth, largely driven by its dominance in AI chip sales.
NVIDIA reported revenue of $46.7 billion for Q2 2025, representing a 56% year-over-year increase and a 6% sequential increase. This result exceeded analysts’ average estimate of $46.05 billion. The company’s revenue from AI infrastructure totalled $41.1 billion, representing a 56% year-over-year growth. The non-GAAP earnings per share (EPS) were $1.05, surpassing the expected $1.01. Additionally, the non-GAAP gross margin was 72.7%, slightly higher than the projected 72.3%, primarily due to a $180 million release of H20 inventory to a customer outside of China.
NVIDIA forecasts Q3 revenue of $54 billion, plus or minus 2%, surpassing Wall Street’s estimate of $53.46 billion. This guidance, however, excludes H20 sales to China due to current geopolitical uncertainties.
The world’s most valuable company reported second-quarter earnings Wednesday that beat Wall Street’s expectations yet again, with investors seeking clues into how Nvidia fared with challenges in the China market.
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— Forbes (@Forbes) August 28, 2025NVIDIA faced significant hurdles in China, a market representing 13% of its 2024 revenue. For instance, U.S. export restrictions on H2O chips, imposed on April 9, 2025, led to a $4 billion loss in H2O sales in Q2. An expected $8 billion revenue hit for the current quarter, as no H20 sales to China-based customers were recorded.
Despite this, Chinese buyers stockpiled H20 chips before the curbs, boosting Q1 revenue. CEO Jensen Huang noted that China’s $50 billion AI market remains largely closed, prompting local firms to focus on homegrown chips.
NVIDIA is adapting to these challenges. For example, the company is developing a new Blackwell-based AI chip for China, pending approval from the U.S. Additionally, a 15% revenue-sharing agreement with the U.S. government could enable $2–$5 billion in H20 sales in Q3 if geopolitical issues ease. CFO Colette Kress emphasised strong demand for NVIDIA’s Blackwell chips, with production scaling rapidly.
