Nvidia (NASDAQ: NVDA) reported another record quarter, driven by soaring demand for its artificial intelligence chips. The company posted $46.74 billion in revenue for the second quarter of 2025, surpassing Wall Street’s forecast of $46.05 billion. Adjusted earnings per share came in at $1.08, above analyst estimates of $1.01.
Despite the strong results, Nvidia stock fell 2.3% in after-hours trading, reflecting investor concerns about an overheated AI market and mounting U.S.–China trade tensions.
Earnings Breakdown
- Total Revenue: $46.74B vs. $46.05B expected
- EPS (adjusted): $1.08 vs. $1.01 expected
- Data Center Revenue: $41.1B vs. $41.3B expected
While the company delivered a clear beat on headline numbers, its key data center business narrowly missed estimates, fueling skepticism about whether Nvidia can sustain its rapid growth trajectory.
U.S.–China Trade War Impact
Nvidia’s H20 AI chip, designed for the Chinese market, remains at the center of trade war tensions. Earlier this year, a U.S. ban on AI chip exports to China cost the company an estimated $4.5 billion in lost revenue during Q1.
In August, Nvidia reached an agreement allowing the U.S. government to collect 15% of H20 sales to China in exchange for export licenses. CFO Colette Kress noted that shipments of the chip could generate $2–5 billion if geopolitical risks ease, but the current outlook excludes those sales.
CEO Jensen Huang emphasized China’s importance, calling it a $50 billion opportunity for 2025 and highlighting that nearly half of the world’s AI researchers are based there.
Growth Outlook and Shareholder Returns
For Q3 2025, Nvidia projected $54 billion in revenue, roughly in line with Wall Street expectations. The board also authorized an additional $60 billion in stock buybacks, on top of the $24.3 billion already returned this year through repurchases and dividends.
Huang confirmed that production of Blackwell, Nvidia’s latest AI superchip, is ramping up rapidly, with “extraordinary demand” across global markets.
Investor Sentiment
Analysts remain divided. Some warn that Nvidia’s valuation is highly dependent on continuous “beat and raise” performance, leaving little room for error. Concerns about an AI bubble and reduced access to China weigh heavily on the stock.
Others remain bullish, pointing to Nvidia’s central role in powering the global AI build-out. Wedbush analyst Dan Ivescalled Nvidia the “clear leader” of the AI revolution, noting that tech giants like Microsoft, Meta, Amazon, and Alphabet are aggressively scaling their AI infrastructure around Nvidia hardware.
