Leading designer of graphics chips Nvidia (NASDAQ: NVDA) met Wall Street’s revenue expectations in Q2 CY2025, with sales up 55.6% year on year to $46.74 billion. The company expects next quarter’s revenue to be around $54 billion, close to analysts’ estimates. Its non-GAAP profit of $1.05 per share was 4% above analysts’ consensus estimates.

Is now the time to buy NVDA? Find out in our full research report (it’s free).

StockStory’s Take

Nvidia’s Q2 results aligned with Wall Street’s expectations, reflecting continued demand for the company’s data center and AI platforms. Management attributed the quarter’s performance to strong adoption of the Blackwell architecture, a seamless transition to next-generation hardware, and broad-based growth across cloud, enterprise, and sovereign AI customers. CFO Colette Kress highlighted, “Factory builds in late July and early August were successfully converted to support the GV300 ramp... full production is underway.” The company also noted increased demand for Hopper and H200 GPUs, supporting diverse AI workloads and reinforcing the value of its CUDA software ecosystem.

Looking ahead, Nvidia’s management expects further revenue acceleration driven by continued AI infrastructure investment, expanding adoption of the Blackwell and upcoming Rubin platforms, and the rise of agentic AI models. CEO Jensen Huang pointed to the expected “$3 to $4 trillion in AI infrastructure spend by the end of the decade,” signaling robust long-term opportunities. However, guidance does not include potential revenue from China due to ongoing licensing and regulatory uncertainties. Management emphasized increased operating expenses as the company accelerates investments to address the magnitude of growth opportunities ahead, with product innovation and supply chain expansion remaining central priorities.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to continued momentum in AI data center platforms, robust networking demand, and smooth execution on product transitions.

• Blackwell platform transition: The rollout of the Blackwell architecture drove sequential growth as customers shifted to the new NVLink 72 rack-scale computing system, which offers significant gains in energy efficiency and performance for AI inference and training.
• Networking revenue surge: The company reported strong demand for its Spectrum X Ethernet and InfiniBand networking solutions, fueled by the need for high-throughput, low-latency interconnects in large-scale AI clusters. Management noted that networking delivered a 98% year-over-year increase in revenue.
• China market uncertainty: Although some H20 sales licenses were granted, geopolitical restrictions continue to limit shipments to China, and no H20 revenue from China was included in the Q3 outlook. Management estimated a $2 to $5 billion opportunity if restrictions ease.
• Sovereign AI and global expansion: Nvidia is benefitting from large-scale AI infrastructure investments by governments and enterprises worldwide, including European Union initiatives and the launch of the UK’s Isambard AI supercomputer. Sovereign AI revenue is projected to more than double year-over-year.
• Inventory and supply chain management: The company increased inventory to support Blackwell and Blackwell Ultra ramps, while maintaining high production output and preparing for widespread market availability of new platforms in the second half of the year.

Drivers of Future Performance

Nvidia’s outlook is shaped by ongoing AI infrastructure growth, rapid product cycles, and the evolving regulatory environment, particularly regarding China.

• AI infrastructure expansion: Management expects continued global investment in AI data centers, with a particular focus on reasoning agentic AI models that require significantly more computational resources than earlier generations. CEO Jensen Huang highlighted that “annual AI infrastructure investments... are on track to invest $600 billion in data center infrastructure and compute this calendar year alone.”
• Next-generation product launches: The upcoming transition to the Rubin platform and the ramp of Blackwell Ultra are expected to drive performance improvements and cost efficiency for customers. Huang emphasized that maintaining an annual product cadence enables customers to maximize revenue and gross margins by adopting the latest advances in performance per watt.
• Geopolitical and competitive risks: Management cited ongoing uncertainty around export licenses for China, which affects potential revenue from H20 and future platforms. They also acknowledged the competitive landscape, particularly the rise of custom ASIC projects, but maintained that Nvidia’s full-stack ecosystem and energy efficiency remain key differentiators.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will be monitoring (1) the pace of customer adoption and monetization for Blackwell and the upcoming Rubin platform, (2) progress in resolving export licensing for China and the potential resumption of H20 shipments, and (3) continued growth in networking revenues as AI factories scale globally. Execution on supply chain expansion and product cadence will also be important markers of Nvidia’s ability to capitalize on industry growth.

Nvidia currently trades at $181.31, in line with $181.60 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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