Nvidia’s Earnings Report Highlights AI Chip Demand and China Challenges

Nvidia's fiscal Q2 2026 earnings surpassed Wall Street expectations, with $1.05 adjusted EPS and $46.74 billion in revenue. The company also announced a $60 billion share repurchase program to bolster earnings per share. Despite these strong figures, the stock dipped post-announcement, reflecting investor concerns over its data center segment.

Revenue from Nvidia's data center business grew 56% year-over-year but fell slightly short of estimates. A notable drag was declining sales of H20 chips in China, where U.S. export restrictions continue to limit the company's ability to sell advanced AI chips. The geopolitical tension underscores the fragility of Nvidia's supply chain and market access.

While the earnings report reaffirmed Nvidia's dominance in AI hardware, the China variable looms large. The company's guidance for Q3 revenue—$54 billion, ahead of forecasts—suggests resilience, but regulatory hurdles could dampen long-term growth in a critical market.