Finance·NvidiaNvidia earnings beat Wall Street’s sky-high expectations, but the stock is falling because ‘there were no H20 sales to China-based customers’By Nino PaoliBy Nino PaoliNews FellowNino PaoliNews FellowNino Paoli is a Dow Jones News Fund fellow at Fortune on the News desk.SEE FULL BIO At Nvidia headquarters in Santa Clara, Calif.Justin Sullivan—Getty ImagesNvidia recorded no China sales revenue for H20 chips and just narrowly beat Wall Street estimates as the AI chipmaker reported quarterly earnings Wednesday.
A small amount of H20 chip inventory int to be sold to China before U.S. intervention in April was sold elsewhere, the company said.
Revenue increased 56% from the same period a year ago to $46.74 billion, exceeding Wall Street’s jection of $46.52 billion, per data compiled by Visible Alpha.
fits came in at $26.4 billion, a 40.8% increase from $18.78 billion last quarter. Nvidia posted diluted earnings per at $1.08, beating jections of $1.02 for the second quarter.
Nvidia’s gross margins grew to 72.4%, up significantly from 61% last quarter.
“duction of Blackwell Ultra is ramping at full speed, and demand is extraordinary,” CEO Jensen Huang said of the behemoth’s next-generation AI chip, which is used in data centers globally, in the earnings release.
“The AI race is on, and Blackwell is the platform at its center.” The top-line results received a lukewarm reaction from investors.
s edged down over 3% to around the $175 mark in ext trading Wednesday evening.
“[The stock movements are] bably just an initial reaction to a so-so number,” Scott Bickley, an advisory fellow at Info- Re Group, told Fortune before the earnings call.
“Which is kind of insane that we’re viewing $46.7 billion in a quarter as ‘so-so,’” he said. The company’s automotive and robotics segment grew the most at 69% year over year.
Nvidia has been navigating trade restrictions on H20 shipments to China since April, and the company said no H20 chip revenue to China was included in the second-quarter figure.
Nvidia estimated $2 billion to $5 billion worth of H20 chips could be shipped to China this quarter, and that some China buyers received licenses over the past few weeks for these transactions.
“Expectations were sky-high, but Nvidia exceeded them again,” Michael Smith, senior portfolio manager and head of the growth equity team at Allspring Global Investments, told Fortune.
Allspring owns Nvidia in some of its funds.
“Margins are rising as Blackwell ramps; China remains a massive untapped opportunity post–export controls; and a $60 billion buyback is an extra sweetener amid record free cash flow.” Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world.
Explore this year's list.