Nvidia’s Q2 Earnings: Strong Performance Fails to Lift Market Sentiment

Nvidia delivered robust Q2 earnings, yet its stock dipped in extended trading as Wall Street focused on the underperformance of its data center unit—the Core of its AI business. Despite a 17% quarter-over-quarter revenue growth in Blackwell Data Center sales, expectations outpaced reality. The company reported zero sales of its H20 AI chips to Chinese customers, instead relying on a $180 million inventory release and $650 million in unrestricted H20 sales to a single non-Chinese buyer.

Gross margins stood at 72.4% GAAP and 72.7% non-GAAP, with the inventory release contributing marginally. Earnings per share were $1.08 GAAP and $1.05 non-GAAP, but adjustments for the H20 inventory release and tax tweaks WOULD have trimmed the figure to $1.04. CEO Jensen Huang emphasized the transformative potential of Blackwell, calling it "the AI platform the world has been waiting for."