NextFin news, Nvidia Corporation, headquartered in Santa Clara, California, reported its second-quarter fiscal 2026 earnings on Thursday, August 28, 2025. The company posted revenue of $46.7 billion, marking a 56% increase compared to the same quarter last year, driven primarily by a 17% sequential rise in its Blackwell Data Center revenue segment.
Despite these strong financial results, Nvidia's stock price fell by 0.5% on the day of the earnings announcement. Market reaction was influenced by concerns over a slight slowdown in data center revenue growth, which increased 5% sequentially to $41.1 billion, slightly missing analyst expectations of $41.3 billion. This represented the slowest quarter-over-quarter growth since the generative AI boom began.
Additional investor apprehension stemmed from ongoing U.S.-China trade restrictions impacting Nvidia's ability to ship its H20 chips to China. The company reported no H20 sales to China-based customers in the quarter, which may have dampened revenue prospects. Nvidia's management also noted that their third-quarter revenue guidance of $54 billion, plus or minus 2%, does not include any expected revenue from H20 shipments to China.
Financially, Nvidia maintained robust gross margins, with GAAP and non-GAAP gross margins of 72.4% and 72.7%, respectively. Earnings per diluted share were $1.08 on a GAAP basis and $1.05 on a non-GAAP basis, both exceeding Wall Street estimates.
Analysts, including Cowen's Joshua Buchalter, described the results as solid but somewhat underwhelming compared to Nvidia's recent exceptional performance. Buchalter highlighted the company's strong demand, smooth transition to the Blackwell Ultra architecture, and improving gross margins nearing 75% as positive indicators.
Overall, Nvidia's earnings report underscores the company's continued leadership in AI hardware and accelerated computing, but the stock's decline reflects investor caution amid geopolitical tensions and concerns about the sustainability of rapid growth in the data center segment.
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