Nvidia has reported record revenue as artificial intelligence fuels strong growth, even while geopolitical pressures challenge the company’s outlook.
On Wednesday, the Santa Clara-based chipmaker announced $46.7bn (£34.6bn) in second-quarter revenue, a 56% increase from the same period in 2024.
Shares fell in after-hours trading after executives acknowledged the company was still “working through geopolitical issues.” Nvidia remains at the center of trade tensions between Washington and Beijing.
Rapid policy changes under the Trump administration, aimed at maintaining US leadership in artificial intelligence, add further uncertainty to the company’s prospects.
Tech giants accelerate AI expansion
Nvidia’s processors have become essential to the global AI surge.
The company highlighted strong demand from Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both firms are rapidly expanding their AI operations.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four major technology firms had doubled annual spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We provide the infrastructure powering that growth.”
Analysts emphasize Nvidia’s dominant position in the AI chip market. Colleen McHugh, chief investment officer at Wealthify, described the company as “the driving force behind the AI boom.”
She stressed that Nvidia relies heavily on continued investment from tech giants. If spending continues, she said, revenue and share prices should keep climbing.
Revenue from data centres rose 56% to $41.1bn but slightly missed analyst expectations. Investor Eileen Burbridge, founding partner of Passion Capital, said this weaker performance triggered the “share price wobble.”
Even so, she described Nvidia’s growth as “unbelievable” while warning that excessive enthusiasm could create a bubble.
In July, Nvidia became the first company in the world valued at $4trn. The firm now expects $54bn in revenue for the current quarter, surpassing Wall Street forecasts.
Geopolitical challenges persist
Despite record earnings, Nvidia faces increasing political risks.
In July, the company announced plans to resume sales of high-end AI chips to China. The decision followed lobbying from Huang, who persuaded the Trump administration to lift its ban on the H20 chip, designed for Chinese buyers.
The restriction had been introduced amid concerns the chips could support China’s military and domestic AI sector.
Executives confirmed that by late July, US officials began reviewing licenses for H20 sales. Some Chinese clients received approvals, but Nvidia has not shipped the chips.
The US government expects to collect 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its new Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is intensifying efforts to expand its domestic semiconductor industry. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s long-term role as “the bellwether of the AI economy” may depend on whether its robotics expansion secures lasting leadership.
