TLDR
- NVIDIA Soars on AI Demand With $46.7B Q2 Revenue but Stock Slips After Hours
- Despite Record Q2 Results, NVIDIA Shares Fall on Macro Jitters and Profit-Taking
- NVIDIA Reports $46.7B Q2 Revenue, Blackwell Surge, But Stock Drops After Market
- AI Boom Lifts NVIDIA to Record Q2 Earnings, Yet Shares Dip in After-Hours Trade
- NVIDIA’s Q2 Revenue Jumps 56% YoY; Strong AI Growth Overshadowed by Stock Slide
NVIDIA posted strong revenue growth in Q2 of fiscal 2026, but shares dropped after the market closed. The stock ended regular trading at $181.60, slipping 0.09%, and fell further to $177.47, down 2.27% after hours. The dip came despite record revenue and a sharp increase in earnings year over year.
The company reported revenue of $46.7 billion, up 6% quarter-over-quarter and 56% year-over-year. Data Center revenue reached $41.1 billion, rising 5% from the previous quarter and also up 56% from a year ago. Blackwell Data Center revenue surged 17% sequentially, underscoring continued AI demand.
NVIDIA recorded no H20 sales to China in the quarter, reporting $650 million in H20 sales to a non-China customer and releasing $180 million in previously reserved inventory. These changes slightly skewed gross margin figures but were clearly flagged in adjusted earnings.
Earnings and Margins Strong Despite Trade Hurdles
NVIDIA reported a GAAP gross margin of 72.4% and a non-GAAP gross margin of 72.7% for the quarter. Adjusting for the H20 release, the non-GAAP gross margin would have stood at 72.3%. Diluted earnings per share came in at $1.08 GAAP and $1.05 non-GAAP, with adjusted non-GAAP EPS at $1.04 excluding H20 effects.
Operating income grew sharply to $30.2 billion on a non-GAAP basis, rising 30% sequentially and 51% year-over-year. Net income hit $25.8 billion non-GAAP, showing a 30% quarterly increase and a 52% rise from the year-ago period. The company also kept operating expenses under control despite increasing AI R&D investment.
NVIDIA guided Q3 revenue to $54.0 billion, plus or minus 2%, and expects gross margins to improve slightly. No H20 revenue from China is assumed in the forecast, as export restrictions remain. The company plans to keep operating expenses growing at a high 30% rate for the fiscal year.
Aggressive Share Repurchases Reinforce Long-Term Strategy
In the first half of fiscal 2026, NVIDIA returned $24.3 billion to shareholders. This included share repurchases and dividends, reflecting strong free cash flow generation. The Board approved an additional $60 billion for repurchase, bringing total available authorization to $74.7 billion.
NVIDIA will pay its next $0.01 quarterly dividend on October 2, 2025, to shareholders of record as of September 11. Management emphasized confidence in long-term demand for Blackwell-based systems and AI-related infrastructure. Buybacks continue to anchor capital allocation, reflecting management’s bullish stance.
Despite the strong fundamentals, the stock faced selling pressure after hours. The decline may reflect profit-taking, macro concerns, or elevated expectations. Still, the long-term growth story remains driven by demand for massive-scale AI computing.
AI Expansion Continues Across Sectors
NVIDIA introduced Blackwell-powered GPUs to enterprise servers at major firms such as Disney, Foxconn, and TSMC. The company also expanded partnerships in Europe and with key hyperscalers to build sovereign AI infrastructure. Spectrum-XGS and DGX Cloud expansions show its global AI footprint is widening.
In gaming, revenue rose 14% quarter-over-quarter, boosted by the launch of GeForce RTX 5060. Professional visualization revenue grew 18% sequentially while automotive climbed 3%, both showing momentum. NVIDIA also launched Jetson and DRIVE platforms targeting robotics and transportation segments.
The company emphasized AI leadership with strong MLPerf benchmarks, new inference formats, and partnerships on quantum computing. With production of Blackwell Ultra scaling fast, management remains confident about continued AI-driven performance gains.
