Nvidia Q2 2026 Earnings Report: Strong Revenue Beat Amid China Market Uncertainty

Nvidia delivered a strong financial performance in its second quarter of fiscal 2026, posting revenue of $46.74 billion and adjusted earnings per share (EPS) of $1.05. Both figures exceeded Wall Street expectations, with revenue surpassing the consensus estimate of $46.06 billion and EPS beating the $1.01 forecast. This reflects robust year-over-year growth driven by heightened demand for Nvidia’s AI-related chips and infrastructure.

The data center segment, which drives the majority of Nvidia’s revenue, saw a 56% year-over-year increase to $41.1 billion. However, revenue missed slightly against the anticipated $41.34 billion, impacted largely by U.S. export restrictions on Nvidia’s H20 AI data center chip sales to China. Nvidia reported no H20 sales to China-based customers in Q2 due to earlier prohibitions that were only partially lifted late in the quarter. These export control measures have created a degree of uncertainty around growth prospects in one of Nvidia’s most important markets.

The gaming division, Nvidia’s second-largest revenue stream, posted $4.3 billion, an increase of 14% sequentially and 49% year-over-year. This growth suggests continued strong consumer enthusiasm for Nvidia’s GPUs in gaming and related applications. Other segments such as professional visualization and automotive/robotics also showed healthy gains, supporting overall revenue diversification.

Looking ahead, Nvidia issued cautious but optimistic guidance for its third quarter. The company forecasted revenue in the range of $52.9 billion to $55.1 billion, broadly exceeding analyst estimates around $53.1 billion. However, this outlook does not include potential revenue from H20 chip sales to China, reflecting ongoing uncertainty due to geopolitical factors and export regulations. CFO Colette Kress noted Nvidia is prepared to ship $2 billion to $5 billion worth of H20 chips to China, but final sales depend on pending U.S. government rulings on a new 15% remittance tax on chip sales. These regulatory issues limit visibility on growth in that key region.

CEO Jensen Huang emphasized the strategic importance of China, which houses about half of the world’s AI researchers and is the second-largest computing market worldwide. He highlighted Nvidia’s role in enabling AI’s global expansion and expressed hope for smoother trade relations to restore full market access. Meanwhile, Nvidia remains focused on advancing its AI leadership with new technologies such as the upcoming Blackwell Ultra AI supercomputers, which could help drive strong infrastructure spending projected to reach trillions of dollars in the coming years.

Despite the geopolitical risks in China, Nvidia’s overall Q2 results reinforce its dominant market position in AI chips and infrastructure. The company’s ability to navigate export restrictions and deepen adoption in other regions will be crucial to sustaining growth momentum. Analysts remain broadly positive, noting that while growth rates may moderate from their early AI boom highs, Nvidia’s leadership and product innovation position it well for the long term.

Nvidia’s fiscal Q2 report showcased robust revenue and profit growth driven by AI demand, offset somewhat by geopolitical trade tensions impacting China sales. The company’s sales outlook is strong but tempered by regulatory uncertainties, particularly in China, which remains a critical market for Nvidia’s future expansion.