News

Nvidia Q2 Results: Stock falls in extended trade despite earnings beat; Here's whyNvidia's revenue grew in excess of 50% for the ninth straight quarter, dating back to mid-2023, when the AI and data centre-led boom led to even triple-digit growth figures for the Jensen Huang-led chip manufacturer. This quarter's growth figure, is the lowest during this period.By Hormaz Fatakia   August 28, 2025, 4:08:44 AM IST (Published)3 Min ReadShares of Wall Street darling and Artificial Intelligence major Nvidia Corp. fell in extended trading on Wednesday, August 27, despite its results for the second quarter of fiscal 2026 turning out to be better than what the street had anticipated.

Revenue for the quarter stood at $46.74 billion, higher than the $46.06 billion estimate, while its Earnings Per Share (EPS) of $1.05, was also better than the $1.01 expectation.

For the ongoing quarter, Nvidia expects revenue to be $54 billion, plus or minus 2%. However, that figure does not factor in any H20 shipments to China, which have been a bone of contention for the company. Despite this, the figure is better than the $53.1 billion projection that analysts were working with. Some analysts had even projected figures in excess of $60 billion.

Nvidia's revenue grew in excess of 50% for the ninth straight quarter, dating back to mid-2023, when the AI and data centre-led boom led to even triple-digit growth figures for the Jensen Huang-led chip manufacturer. This quarter's growth figure, is the lowest during this period. The company's guidance is projecting a 10th straight quarter of 50%+ growth, but slower than the 56% seen in Q2.

Another key reason why the stock declined in extended trading is the fact that its data centre business, now its largest source of revenue, missed expectations for the second quarter in a row. Nvidia's data centre business revenue stood at $41.1 billion, short of the average $41.3 billion estimates.

The results showed hints that spending by giant data center operators “could tighten at the margins if near-term returns from AI applications remain difficult to quantify,” Emarketer analyst Jacob Bourne said in a note.

Uncertainties over China continue to persist. The company noted that the US government has not yet crystalised its plan to take a 15% revenue from its AI chip sales to China, and neither has it factored in that impact in its guidance.

“Any request for a percentage of the revenue by the USG may subject us to litigation, increase our costs, and harm our competitive position and benefit competitors that are not subject to such arrangements,” Nvidia said in a filing.

Depending on the license, Nvidia is expected to sell H20 chips between $2 billion and $5 billion to China. CFO Collette Kress said that the figure could be higher if there is demand for the same.

Aside from Nvidia’s struggles in China, the biggest impediment to growth has been the availability of supply. Like most chipmakers, Nvidia doesn’t own factories and relies on outsourced production, chiefly from Taiwan Semiconductor Manufacturing Co. Ramping up production of new technology remains an ongoing challenge.

Shares of Nvidia fell 3.1% in extended trading, after ending the regular session little changed at $181.6, which is close to its record high of $184.48.

(With Inputs From Agencies.)Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsNvidiaNVIDIA earningsNvidia share pricenvidia shares