Nvidia has posted record revenue as demand for artificial intelligence surges, despite growing political tensions affecting global markets.
On Wednesday, the Santa Clara-based chipmaker reported $46.7bn (£34.6bn) in second-quarter revenue, a 56% increase from the same period in 2024.
Shares fell in after-hours trading after executives admitted the company was still “working through geopolitical issues.” Nvidia remains at the center of trade disputes between Washington and Beijing.
Frequent policy changes under the Trump administration, aimed at protecting US dominance in artificial intelligence, add further uncertainty for the company.
Tech giants drive AI growth
Nvidia’s processors are central to the global AI boom.
The company reported strong demand from major technology players, including Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both firms are rapidly expanding AI operations.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four leading tech firms had doubled annual spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We provide the infrastructure to power that growth.”
Analysts highlight Nvidia’s dominant market position. Colleen McHugh, chief investment officer at Wealthify, described the company as “the driving force behind the AI boom.”
She noted Nvidia depends heavily on continued investment from tech giants. If spending persists, revenue and share prices should keep rising.
Revenue from data centres rose 56% to $41.1bn but slightly missed analyst expectations. Investor Eileen Burbridge, founding partner of Passion Capital, said this weaker performance triggered the “share price wobble.”
Even so, she described Nvidia’s growth as “unbelievable” while cautioning that excessive excitement could create a bubble.
In July, Nvidia became the first company in the world valued at $4trn. The firm now expects $54bn in revenue for the current quarter, surpassing Wall Street forecasts.
Geopolitical risks loom
Despite record earnings, Nvidia faces increasing political challenges.
In July, the company announced plans to resume sales of high-end AI chips to China. The decision followed lobbying from Huang, who persuaded the Trump administration to lift its ban on the H20 chip, designed for Chinese customers.
The restriction had been introduced amid concerns that the chips could aid China’s military and domestic AI sector.
Executives confirmed that by late July, US officials began reviewing licenses for H20 sales. Some Chinese clients received approvals, but Nvidia has not shipped the chips.
The US government expects to collect 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its new Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is accelerating efforts to expand its domestic semiconductor industry. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s long-term role as “the bellwether of the AI economy” may depend on whether its robotics expansion secures lasting leadership.
