Insider Brief
- Nvidia reported Q2 fiscal 2026 revenue of $46.7 billion, up 6% from Q1 and 56% year-over-year, with data center sales rising 5% sequentially to $41.1 billion—just below analyst forecasts of $41.3 billion. Blackwell chip revenue grew 17% quarter-over-quarter, though H20 sales to China remained restricted.
- Net income surged 41% from Q1 to $26.4 billion, with GAAP EPS at $1.08 and non-GAAP EPS at $1.05. The company said about half of its data center revenue came from large cloud service providers, reinforcing their central role in its AI growth strategy.
- Despite the earnings beat and upbeat guidance projecting $54 billion in Q3 revenue, shares fell 3% post-report and slipped another 1.5% premarket Thursday. With a $4.4 trillion market cap and an 8.1% S&P 500 weighting, Nvidia’s results continue to heavily influence broader equity market sentiment.
Nvidia shares slipped Thursday as investors weighed its second-quarter results, which beat expectations overall but fell just short in data center revenue. The company reported $41.1 billion in sales from the segment, slightly under the $41.3 billion forecast by analysts, though still well above the $26.2 billion posted a year earlier. The figures excluded sales of its H20 chips in China, which remain restricted.
According to Nvidia, for the second quarter of fiscal 2026, the company reported revenue of $46.7 billion, up 6% from the previous quarter and 56% from a year ago. Data center sales, the core of Nvidia’s business, climbed 5% sequentially to $41.1 billion, also up 56% from a year earlier. Revenue from its Blackwell data center products grew 17% compared with the prior quarter.
Founder and CEO Jensen Huang said in a statement that production of the Blackwell chips, which he described as a “generational leap” for AI, is “ramping up full speed” due to demand. “The AI race is on, and Blackwell is the platform at its center,” added.
Net income rose to $26.4 billion under GAAP, up 41% from the first quarter and 59% from a year earlier. Diluted earnings per share were $1.08, compared with $0.76 in the prior quarter and $0.67 a year ago. On a non-GAAP basis, earnings per share were $1.05. Excluding the H20 inventory release, non-GAAP EPS would have been $1.04.
The company also disclosed that about half of its data center revenue, the company’s growth driver, came from large cloud service providers. Despite the earnings beat, Wall Street reacted cautiously, with the stock down 1.5% in premarket trading Thursday after sliding roughly 3% following Wednesday’s report.
Nvidia said the U.S. government has not finalized a proposed agreement that would require the company to share 15% of revenue from H20 chip sales to China in exchange for export licenses, according to Yahoo Finance. CFO Colette Kress told investors that while officials have indicated such an expectation, no formal regulation has been issued. The comments came during a call following Nvidia’s second-quarter earnings report.
Optimism around Nvidia’s earnings after the close had helped U.S. stock indexes close higher Wednesday, with the S&P 500 reaching a new record and the Nasdaq 100 touching a one-week high, according to Barchart.
With a $4.4 trillion market cap and an 8.1% weighting in the S&P 500, Nvidia carries outsized influence over the market. The company has missed earnings estimates only once in the past five years, and expectations for another strong report helped lift sentiment across equities, Barchart noted.
Nvidia also offered an upbeat outlook. For the third quarter, it expects revenue of $54 billion, plus or minus 2%, with GAAP and non-GAAP gross margins forecast around 73.3% and 73.5%, respectively. Operating expenses are projected to rise, with GAAP costs at about $5.9 billion and non-GAAP at $4.2 billion.
