Nvidia has achieved record revenue as artificial intelligence fuels rapid expansion, even amid rising geopolitical tensions.
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 caught in the trade disputes between Washington and Beijing.
Rapid US policy changes under the Trump administration, aimed at maintaining American leadership in artificial intelligence, add further uncertainty to the company’s outlook.
Tech giants push AI demand
Nvidia’s processors are at the heart of the global AI boom.
The company highlighted strong demand from major technology firms, including Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both 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 companies had doubled annual spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We provide the infrastructure to power that expansion.”
Analysts highlight Nvidia’s unmatched market position. Colleen McHugh, chief investment officer at Wealthify, described the company as “the driving force behind the AI boom.”
She emphasized that Nvidia relies heavily on continuous 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 warning that excessive enthusiasm 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.
Geopolitics test Nvidia’s expansion
Despite record earnings, Nvidia faces rising political risks.
In July, the company announced plans to resume sales of high-end AI chips to China. The move followed lobbying from Huang, who persuaded the Trump administration to lift its ban on the H20 chip, designed for Chinese buyers.
The restriction had been imposed amid concerns the chips could support 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 grow 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.
