Nvidia Corp. delivered stronger-than-expected second-quarter results for its 2026 fiscal year, but a shortfall in data center revenue held back a broader rally, as ongoing U.S. restrictions on sales to China undermined performance in a key segment.
Shares of the chipmaker dropped 3.14% in after-hours trade following the release. Adjusted earnings per share came in at $1.05, topping analysts’ consensus call for $1.01. Revenue for the quarter totaled $46.7 billion, surpassing analysts’ projections of $46.23 billion.
The data center division, which anchors Nvidia’s AI-driven growth narrative, showed a 56% year-on-year surge to $41.1 billion. That result, however, marginally trailed the $41.25 billion expected by analysts, as the company faced continued pressure from U.S. export controls on advanced chips.
The company stated that there were no H20 sales to China-based customers in the second quarter. The lift in advanced chips to China was made at the end of July following the meeting between the U.S. President Donald Trump and Nvidia’s CEO Jensen Huang.
Looking ahead, Nvidia projected third-quarter revenue of $54 billion (±2%), eclipsing consensus expectations of $52.76 billion. Notably, the firm’s outlook excludes potential H20 chip sales in China, given persistent scrutiny from both the U.S. and Chinese governments. Even with U.S. approval now in place, Nvidia faces increased competition from domestic rivals in China as Beijing urges a pivot toward homegrown technology and intensifies security concerns.
Speaking to analysts, CFO Colette Kress confirmed that no H20 shipments to China had been executed so far in the third quarter. She noted uncertainty surrounding any requirement for Nvidia to share a portion of its China revenues with the U.S. government, as floated by officials last week. Kress acknowledged that if diplomatic tensions ease, potential third-quarter revenue from H20 sales to China could range from $2 billion to $5 billion but emphasized the unpredictability of the Chinese landscape.
In tandem with the earnings report, Nvidia announced a regular dividend of $0.01 per share, payable October 2, to holders of record as of September 11, 2025. The company also revealed a new $60 billion share repurchase program, underlining confidence in its long-term growth trajectory amid an increasingly complex geopolitical backdrop.
“Blackwell is the AI platform the world has been waiting for — demand is extraordinary as reasoning AI drives massive increases in training and inference performance.” – Jensen Huang, CEO.
