In the second quarter of fiscal year 2025, Nvidia posted impressive results, though its outlook for the coming months tempered investor enthusiasm. Revenue grew 56% year-on-year, reaching $46.7 billion, in line with market expectations. However, this marked the lowest percentage revenue increase in more than two years, raising concerns that the company’s explosive AI-driven expansion may be slowing after a period of intense investment.
Earnings per share came in at $1.05, beating analyst estimates of $1.01. The data center segment generated $41.1 billion in revenue, slightly below forecasts, while the gaming division surprised positively with $4.29 billion versus expectations of $3.8 billion. The automotive segment underperformed, reporting $586 million in revenue, also below market projections.
One key challenge was the Chinese market, where Nvidia recorded no sales of its H20 chips in Q2. This resulted in a $4 billion quarter-on-quarter revenue decline. The company’s Q3 guidance excludes H20 sales in China due to U.S. regulatory restrictions. Resuming shipments will depend on securing the necessary approvals. With China representing a market potentially worth up to $50 billion annually, strategic uncertainty remains high.
Despite these hurdles, CEO Jensen Huang remains optimistic about the long-term future of artificial intelligence. He estimates that global investment in AI infrastructure could reach $3–4 trillion by the end of the decade. Against this backdrop, Nvidia continues to lobby the U.S. administration for approval to export its advanced Blackwell chips to China.
The company also announced a new $60 billion share buyback program. With a market capitalization exceeding $4 trillion, Nvidia is now the world’s most valuable publicly traded company. Still, its rapid growth raises some concerns, particularly due to heavy reliance on a handful of major clients such as Microsoft and Amazon, as well as its dependence on Taiwan’s TSMC for chip manufacturing.
Despite record financial results and management’s upbeat view of AI’s future, the market reacted cautiously to Nvidia’s Q3 revenue guidance of around $54 billion. While this matched analyst consensus, it fell short of the most optimistic forecasts of over $60 billion. This suggests that after two years of rapid expansion, Nvidia may be entering a stabilization phase. Its future success will hinge on diversifying revenue streams, strengthening control over its supply chain, and navigating an increasingly complex geopolitical environment.
By Krzysztof Kamiński – OANDA TMS
Source: ceo.com.pl
