Nvidia Q2 Earnings, Guidance Top Street View As AI Fuels Record Data Center Revenue: Gross Margin Falls Quarter-Over-Quarter, Stock Drops (UPDATED)

Editor’s note: This story has been updated with additional details.

Nvidia Corp. NVDA continued its streak of outperformance as the artificial intelligence stalwart’s second-quarter earnings and revenue outdid expectations Wednesday.

Strong data center revenue boosted the company’s topline but the gross margin contracted from the first quarter. Nvidia issued above-consensus third-quarter revenue guidance and announced a $50-billion additional stock repurchase authorization. Despite the positive results, the shares were down 3.6% in after-hours trading.

Nvidia’s Key Q2 Numbers: The Santa Clara, California-based chipmaker reported earnings and revenue that more than doubled from a year ago and also bettered the numbers from a quarter ago.

Here’s how the key numbers compare to estimates and prior metrics:

	Q2’25 Actuals	Q2’25 Consensus*	Q2’25 Guidance	Y-o-Y Change	Q-o-Q Change
Revenue	$30.04B	$28.68B	$28B +/- 2%	+122%	+15%
Non-GAAP EPS	68 cents	64 cents	N/A	+152%	+11%
Gross margin (non-GAAP)	75.7%	N/A	75.5% +/- 50 bps	+4.5 pts	-3.2 pts

Nvidia founder and CEO Jensen Huang said: “NVIDIA achieved record revenues as global data centers are in full throttle to modernize the entire computing stack with accelerated computing and generative AI.

“Hopper demand remains strong, and the anticipation for Blackwell is incredible,” he added.

The Nvidia CEO also noted that Blackwell samples were shipping to partners and customers.

“Spectrum-X Ethernet for AI and NVIDIA AI Enterprise software are two new product categories achieving significant scale, demonstrating that NVIDIA is a full-stack and data center-scale platform,” he said.

The sequential drop in gross margin was attributed to inventory provisions for low-yielding Blackwell material and a higher mix of new products within the data center business, potentially referring to the H20 chips developed exclusively for China.

See Also: How To Buy Nvidia (NVDA) Stock

Nvidia Shareholder Returns: Nvidia’s board approved an additional $50 billion in share repurchases without expiration. The company said it will pay its next quarterly cash dividend of 1 cent per share on Oct. 3, to all shareholders of record as of Sept. 12.

Nvidia's Q3 Performance By Segment: The data center business reported another quarter of record revenue, which more than doubled year-over-year, thanks to strong demand for Hopper GPU for training and inference of large-language models. The sequential growth came about due to robust demand from consumer internet and enterprise companies. Cloud service provides contributed to 45% of data center revenue, while enterprise and internet companies accounted for more than 50%.

The rest of the business segments also grew revenue both year-over-year and sequentially.

	Revenue	% of Total Revenue*	Y-o-Y Growth	Q-o-Q Growth
Data Center	$26.27B	87.45%	154.55%	16.45%
Gaming & AI PC	$2.88B	9.59%	15.66%	8.68%
Prof. Viz	$454M	1.50%	18.42%	4.65%
Auto	$346M	1.17%	40%	6.06%

*percentages may not add up to 100 as OEM and other revenues are left out of the comparisons

Nvidia Q3 Outlook: Nvidia earnings are considered a barometer of artificial intelligence spending. The chipmaker said it expects third-quarter revenue of $32.5 billion plus or minus 2%. The consensus estimates are for earnings of 71 cents per share and revenue of $31.69 billion.

The company guided to a third-quarter non-GAAP gross margin of 75% plus or minus 50 basis points. For the full-year, Nvidia guided to a non-GAAP gross margin in the mid-70% range. Nvidia’s annual earnings and revenue are estimated at $2.75 per share and $121.63 billion, respectively.

Nvidia’s Earnings Call Focus: The rumored delay in the Blackwell 200 AI accelerator has caused uneasiness among traders. Fund manager Louis Navellier said he expects investors to be glued to the management commentary regarding the timeline for the chip more so than on the quarterly revenue and earnings.

TFI analyst Ming-Chi Kuo said he would look for whether the Blackwell 200 re-tape-out would impact profit and margin in the near term. The rumored delay in the AI chip was attributed to a design flaw. Kuo said if the company can provide details to allay investors’ concerns about GB200 shipment schedules, it would benefit the stock performance of both Nvidia and its supply chain in the next three months.

The earnings call is scheduled for 5 p.m. EDT.

Nvidia Stock: The company’s stock has been a stellar performer, having gained about 154% year-to-date. This compares to the 17.24% gain for the S&P 500 Index and the 15% advance by the Nasdaq 100 Index. The iShares Semiconductor ETF SOX has added about 18% during the same period.

Nvidia ended Wednesday’s session down 2.1% to $125.61, according to Benzinga Pro data.

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Nvidia CEO Jensen Huang Showcases with GB200 Grace Blackwell Superchips. Photo courtesy of Nvidia.