Nvidia Earnings: Stock Falls As China Sales Remain Uncertain

In his closing remarks, Huang shouts out Blackwell’s platform and says it’s the “AI platform the world’s been waiting for.” He also mentions Rubin and says Blackwell Ultra is “ramping at full speed.”

Eventually, he said Nvidia will need to build two factories, one for the machines and another for robotic AI.

Nvidia’s stock is down 2.7% in after-hours trading as Huang ends the call.

Nvidia CEO Jensen Huang says revenues from AI-native startups could surge 10 times, from about $20 billion this year to as much as $200 billion next year, noting that they already grew 10x compared to 2024.

Huang adds that funding for AI startups has already hit $180 billion in 2025, with open-source models helping drive adoption across industries from large enterprises to robotics.

Huang says revenue generation, AI capability, and customer margins can be improved through releasing new architectures. He says customers should build data centers on “annual rhythm,” but he didn’t give too many details about Nvidia’s next generation of chip architecture, Rubin, which is expected in 2026.

“Rubin has a lot of great ideas, I’m anxious to tell you, but I can’t right now,” Huang says, teasing that he’ll share more at Nvidia’s next GTC conference.

“We just have to keep advocating,” Huang says of the company’s efforts to convince the Trump administration to let it do business in China.

He says the chipmaker is talking to the administration about “the importance of American companies” getting access to China’s market.

Earlier in the call, Kress said that the company is awaiting a formal regulation on the 15% remittance that the White House wants Nvidia and AMD to pay from chip sales to China.

Huang says he sees massive market potential in China that US technology companies need to be able to take advantage of.

“It is the second largest computing market in the world, and it is also the home of AI researchers. About 50% of the world’s AI researchers in China,” he says. “So it’s fairly important, I think, for the American technology companies to be able to address that market.”

CEO Jensen Huang says that Nvidia’s Blackwell is well-positioned for what he sees as the revolutionary changes brought about by agentic AI.

“Where chatbots used to be one-shot, you give it a prompt, and it would generate the answer,” Huang says. “Now, the AI does research, it thinks, it does a plan, and it might use tools.”

Huang says the amount of computation necessary for agentic AI models could be “a 100 times, a thousand times, and you potentially even more.” As a result, he says that agentic AI has grown rapidly over the last year.

“And, of course, the effectiveness has also grown tremendously,” he says. “The amount of hallucination has dropped significantly.”

Kress says that Nvidia is ready to ship anywhere between $2 to $5 billion in H20 chips, but the shipments hinge on ongoing geopolitical tensions resolving.

“We’re still waiting on several of the geopolitical issues going back and forth between the governments and the companies trying to determine their purchases and what they want to do,” she says.

Nvidia CEO Jensen Huang speaks for the first time on the call. (No prepared remarks for the Nvidia CEO this time around.)

Nvidia’s gaming revenue reached a record $4.3 billion, a 49% year-over-year increase, Kress says.

While Nvidia’s AI chips are all the rage among Big Tech, the company used to be better known for its gaming chips for PCs, which it continues to sell.

Revenue for this segment in the previous quarter was $3.8 billion.

CFO Kress says the company hasn’t shipped any H20 chips to China this quarter, despite some customers receiving licenses in recent weeks.

She says US officials have floated taking a 15% cut of licensed H20 sales to China, but no regulation enforcing this has been published yet. Nvidia is excluding China’s H20 revenue from its Q3 outlook while Nvidia continues to work through geopolitical issues.

A key update: If restrictions ease, the CFO estimates $2 to $5 billion in H20 sales could flow in the third quarter.

Nvidia’s stock ticked slightly higher after hours following the remarks.

Nvidia CFO Colette Kress says the company expects $3 to $4 trillion in AI infrastructure spending by 2030.

“The scale and scope of these buildouts presents significant long-term growth opportunities for Nvidia,” she says.

CEO Jensen Huang and CFO Colette Kress are on the call, which begins with the executives reading prepared remarks. Afterward, the executives will field questions from analysts.

“Coming off a new rally to all-time highs, being merely on the mark in terms of revenue simply wouldn’t cut it for Nvidia this time around,” wrote Thomas Monteiro, senior analyst at Investing.com. “Saying the stock was priced for perfection would be an enormous understatement, as it was, in fact, in need of another massive beat.”

“And even though the numbers once again came out very solid—particularly driven by another masterclass in datacenter growth and extremely hot demand across the board—the reality is that without the much-needed push from H20 sales in China, Nvidia simply cannot sustain the type of growth priced into its valuation. This remains true even against a favorable FX backdrop,” he added.

In a sign of its financial strength, Nvidia says its board approved $60 billion in share repurchases on Tuesday. That’s the company’s largest repurchase to date, topping the $50 billion it authorized last year.

It also ranks among the biggest in US history — Apple holds the record with a $110 billion announcement in 2024.

Share repurchases let companies buy back their own stock, reducing the number of shares on the market. That can boost earnings per share and often lifts a company’s stock price — a win for investors. Critics say buybacks can also be a red flag if companies prioritize them over reinvesting in growth, like R&D.

Nvidia appears to still be figuring out what the coming months look like for its China business.

For now, Nvidia has removed any anticipated H20 sales to China from its third-quarter guidance.

It did, however, still sell some H20 chips outside of the region in the current quarter.

“In the second quarter of fiscal 2026, we benefited from a $180 million release of previously reserved H20 inventory related to the sale of approximately $650 million of H20 to an unrestricted customer outside of China,” the company said. “There were no H20 sales to China-based customers in the second quarter.”

CEO Jensen Huang or CFO Colette Kress may go into greater detail on H20 on the 5 p.m. ET analyst call.

The stock fell 0.1% on Wednesday in a muted session as investors awaited second-quarter numbers. It closed the day less than 1% from a record high.

The AI capex race is poised to continue; that’s great news for Nvidia.

Amazon, Microsoft, Google, and Meta all announced increases to their capex plans during their quarterly earnings — even the usually frugal Apple is trying not to fall behind. OpenAI executives have recently discussed their company’s insatiable appetite for GPUs.

All of these trends are great news for Nvidia, which sees a large portion of its chips revenue driven by four unnamed clients that many assume to be Big Tech giants.

Before its earnings release, Goldman Sachs analysts wrote that Nvidia’s share price had previously rallied higher in the wake of larger capex spending.

William Blair said that US-based hyperscalers are expected to spend roughly $398 billion in capex this year. By 2028, the firm expects that to grow to $503 billion.

— Brent D. Griffiths

Analysts and investors will be looking for updates on Nvidia’s development of a more advanced chip to sell to China.

Nvidia is working on a chip would be more powerful than the H20 to sell to China, according to a recent Reuters report. President Donald Trump recently suggested he may be open to Nvidia selling a more powerful GPU chip to China, although there are still regulatory barriers in the way as well as deep-rooted concerns among lawmakers regarding China’s access to AI technology.

— Ana Altchek

Wall Street’s concerns about an AI bubble are likely to hang over Nvidia’s earnings.

Nvidia, which has beaten expectations in 11 of the last 12 quarters, could put those fears to rest. If the chipmaker shows signs of slowing, it could also dial up the bubble talk even further.

Last week, OpenAI CEO Sam Altman gave renewed voice to worries that some investors are overhyping AI. Big Tech and leading AI companies are in the thick of a capex spending war that is so massive that it is uplifting the entire US economy, driving GDP growth.

During a dinner with reporters, Altman compared the current situation to the dot-com era. When that bubble burst in the early 2000s, roughly $5 trillion in market cap was wiped out. Some companies, including WorldCom and Pets.com, never returned.

Critics of the AI bubble theory, including AMD’s Lisa Su, have said that AI will bring about such massive changes that it only makes sense that such large investments are needed to fuel the emerging technology.

— Brent D. Griffiths

In more potentially bullish news for Nvidia, Saudi Arabia’s flagship AI project, Humain, says it expects approval from the Trump administration to buy Nvidia chips, Semafor reports.

The kingdom has poured billions into Humain, which is building some of the world’s largest data centers.

CEO Tareq Amin told Semafor that he expects Nvidia will be cleared to supply Humain. US export controls have so far limited its access.

Humain’s data centers currently run on chips from startup Groq. They’ve already sold out of capacity, in another sign of massive global demand for AI chips.

The company expects to open its data centers in 2026, Bloomberg reported.

— Charles Rollet

President Trump reportedly offered a deal to ease restrictions on Nvidia selling H20 chips to China last month, a major win for Huang and the chipmaker, which has been entangled in trade tensions for several years. The reversal reportedly came with an agreement for the US government to get a 15% cut of the revenue from H20 sales to the region.

Challenges still remain for Nvidia sales in China, though.

Nvidia asked some of its suppliers, including Arizona-based Amkor Technology and South Korea’s Samsung Electronics, to halt production related to the H20 chip, The Information reported on Thursday. Despite the deal with the Trump administration to resume selling its H20 chips to China, the Chinese government gave a directive to local tech companies to stop buying the GPUs due to security concerns, the report said.

Analysts will be listening for more details about how Nvidia sees its business in China shaping up amid the tensions.

— Ana Altchek

Decades ago, Jensen Huang reportedly said that Nvidia needed “to kill” Intel. Now, the rival chipmaker has the US government in its corner.

Under Trump’s leadership, US taxpayers are now Intel’s largest shareholder. According to “The Nvidia Way: Jensen Huang and the Making of a Tech Giant,” Huang said in 1997 that Nvidia needed to eliminate Intel after it decided to make its own graphics chips.

“They are going to put us out of business,” Huang said, according to the book. “Our job is to go kill them before they put us out of business. We need to go kill Intel.”

Questions linger about how the Intel-US government partnership will work. Treasury Secretary Scott Bessent said before the deal was finalized that the White House wouldn’t use its stake to pressure companies to do business with Intel, which has seen its share of the advanced chip market decline.

Huang has led Nvidia to blow by its once-stronger competitor, but Intel now has a powerful backer in the US government, a topic that is likely to come up on the analyst call.

— Brent D. Griffiths

Demand for Nvidia’s GB200 chip is expected to see a “significant acceleration” in sell-through shipments through July, with that momentum carrying through the second half of the year, Baird analysts wrote in a note.

Nvidia is also readying to release its GB300 AI chip, which could launch as soon as late September.

“The AI GPU competitive landscape remains very favorable to Nvidia for the second half as well as next year,” the firm wrote in a note on Monday.

Baird reiterated its “Outperform” rating on the stock and lifted its price target to $225 from $195 a share, implying 25% upside.

In Nvidia’s last earnings call, Huang said the chipmaker had more Blackwell orders than it had at its GTC conference.

The CEO said Nvidia would be increasing its supply chain in the US and “building it here on shore.” While companies typically can’t shift supply chains overnight, analysts will likely want an update on the chipmaker’s progress.

— Ana Altchek

Nvidia is likely to beat on revenue, JPMorgan said, estimating that the chipmaker would report $46 billion to $47 billion in revenue for the quarter.

The bank also predicted that Nvidia would issue a $53 billion-$54 billion revenue guidance for the fourth quarter, thanks to healthy demand for its GB200 chip and Blackwell rack.

“We believe near-term AI fundamentals are strong, driven by strong hyperscale capex spending. This trend is evident in the upward revision in capex during the Q2 2025 earnings season by the cloud/hyperscale companies, and the strong results/guidance telegraphed by other AI beneficiaries,” the bank said in a note to clients on Monday.

Analysts reiterated their “overweight” rating on the stock.

Chinese semiconductor company Cambricon reported record profit in the first half of the year, with revenue reaching $402 million.

Although that’s still far below Nvidia’s $44 billion revenue from last quarter, it marks significant progress as one of several local competitors gaining ground while Nvidia works to maintain its dominance in the region. Huang may face questions about how he plans to maintain an edge in China, especially amid ongoing US-China trade tensions.

— Ana Altchek

Analysts at Stifel said they expected Nvidia to beat earnings estimates for the quarter and post “healthy” guidance for the third quarter, thanks to strong demand for its chips.

“The longer-term bull-case emphasizes that AI-driven demand will remain robust and NVDA should maintain their market leadership in AI-accelerators into circa-2030 at the very least,” they wrote.

They continued: “As it stands today, we lean more toward the bull case, while underscoring that supply-side risk (including tariffs and trade regulations) is the key overhang to the name.”

Analysts reiterated their “Buy” rating on the stock and raised their price target to $212 from the prior $202, implying 18% upside.

Evercore analysts said they expected AI capex to soar 72% in 2025, adding that cloud demand at companies like Amazon and Azure suggested that AI “hit a tipping point at enterprises.”

Industry checks also suggest there’s strong demand for Nvidia’s Blackwell product line, and that the company’s software remains the “solution of choice” for training large language models.

“NVDA remains our top pick, near-term due to improving visibility, longer-term, as we believe it could ultimately capture up to 16% weighting of the S&P 500 Index,” they added. At the time analysts wrote the note, Nvidia made up around 8% of the benchmark index.

Evercore reiterated its “Outperform” rating on the stock and lifted its price target to $214 a share from $190 a share, implying 19% upside from current levels.

Second quarter

Third quarter

• Revenue estimate: $53.46 billion
• Adjusted gross margin estimate: 73.4%
• Adjusted operating expenses estimate: $4.26 billion
• Capital expenditure estimate: $1.23 billion

Full year 2026

• Revenue estimate: $203.68 billion
• Capital expenditure estimate: $4.72 billion

Source: Bloomberg

Correction, Wednesday, August 27 — An earlier version of this post incorrectly presented previous remarks from Nvidia’s Q1 analyst call as being said on the Q2 call — those quotes have been removed.