Nvidia has posted record revenue as artificial intelligence drives strong demand, even while international tensions create uncertainty for the company.
On Wednesday, the Santa Clara-based chipmaker reported $46.7bn (£34.6bn) in second-quarter revenue, a 56% increase from the same period in 2024.
Shares dipped in after-hours trading after executives admitted the company was still “working through geopolitical issues.” Nvidia remains caught in the ongoing trade dispute between Washington and Beijing.
Frequent US policy changes under the Trump administration, aimed at maintaining American leadership in artificial intelligence, add further risk to the company’s outlook.
Tech giants power AI growth
Nvidia’s processors have become essential to the AI revolution.
The company reported strong demand from major technology firms, including Meta, owner of Instagram, and OpenAI, developer of ChatGPT. Both are rapidly expanding their AI capabilities.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four leading tech 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 highlight Nvidia’s unmatched 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 noted that Nvidia depends heavily on tech giants’ continued investment. If spending continues, she said, revenue and share prices will keep rising.
Data centre revenue 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 cautioning that excessive excitement could create a bubble.
In July, Nvidia became the world’s first $4trn company. The firm now expects $54bn in revenue for the current quarter, exceeding Wall Street forecasts.
Geopolitical risks challenge Nvidia
Despite record earnings, Nvidia faces growing political pressures.
In July, the company announced plans to resume sales of high-end AI chips to China. The move followed lobbying from Huang, who persuaded the Trump administration to lift its ban on the H20 chip, designed for Chinese buyers.
The ban had been imposed amid concerns that the technology 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 firms received approvals, but Nvidia has not shipped any chips.
The US government expects to claim 15% of revenue from licensed H20 transactions. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is accelerating efforts to expand its domestic semiconductor production. “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.
