Nvidia (NVDA) delivered its much-anticipated Q2 2025 earnings report on Wednesday after the closing bell, topping Wall Street’s expectations on both the top and bottom lines. Still, a slight miss in its critical data center segment tempered investor enthusiasm, pushing shares down more than 3% in after-hours trading.
Revenue and Earnings: Solid Beat
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Revenue: $46.7 billion (vs. $46.2B expected)
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Adjusted EPS: $1.05 (vs. $1.01 expected)
For comparison, Nvidia reported $30 billion in revenue and $0.68 EPS in the same quarter last year, underscoring just how far the AI chipmaker has come since the generative AI boom ignited global demand.
Data Center Revenue: A Key Pressure Point
Nvidia’s data center revenue reached $41.1 billion, just under analysts’ $41.3B estimate. While still a massive 57% increase year-over-year (from $26.2B), the miss was enough to spark a sell-off.
Nvidia also clarified that sales of its H20 chips to China were not included in these results — a factor that contributed to a 1% sequential decline in compute revenue, equivalent to a $4 billion shortfall. Roughly 50% of data center revenue came from large cloud service providers, highlighting Nvidia’s reliance on hyperscale partners like Amazon, Microsoft, and Google.
Gaming: A Bright Spot
The gaming segment, Nvidia’s traditional core business, posted $4.3 billion in revenue, beating expectations. This suggests that despite the AI frenzy, the gaming GPU market remains a reliable driver of growth.
Outlook: Blackwell Chips Lead the Next Chapter
Looking ahead, Nvidia projected Q3 revenue of $54 billion (±2%), above analyst expectations of $53.4B. Importantly, this forecast also excludes H20 chip sales, leaving room for potential upside.
CEO Jensen Huang struck an optimistic tone, stating:
“Production of our next-gen Blackwell chips is ramping at full speed, and demand is extraordinary. The AI race is on, and Blackwell is the platform at its center.”
The Blackwell GPU architecture is widely seen as Nvidia’s next big leap in powering AI workloads, cloud computing, and generative AI applications.
Stock Buybacks and Market Context
Nvidia approved an additional $60 billion stock buyback program, signaling confidence in long-term growth. Shares are already up 35% year-to-date and over 40% in the past 12 months, fueled by the company’s unmatched dominance in AI chips.
In July, Nvidia became the first company ever to surpass a $4 trillion market cap, a milestone that cements its status as the face of the AI hardware revolution.
Geopolitical Wrinkle: Trump’s China Policy
Nvidia’s China sales remain under the spotlight. After initially banning AI chip exports to China in April, President Trump reversed course in July, allowing sales but imposing a 15% government cut on revenue from the region.
Adding further complexity, Trump announced a 100% tariff on semiconductor imports unless companies commit to building in the U.S. Nvidia is expected to be exempt from this tariff, but the evolving policy landscape remains a risk factor.
Bottom Line
Despite a slight miss in data center revenue, Nvidia’s Q2 2025 earnings highlight unstoppable momentum in AI chip demand. With Blackwell chips ramping production and a robust Q3 outlook, the company remains firmly positioned at the center of the global AI race.
The after-hours dip may reflect sky-high investor expectations, but Nvidia’s fundamentals — and its unrivaled role in AI infrastructure — remain stronger than ever.
