Nvidia has posted record revenue as global demand for artificial intelligence accelerates, even amid rising geopolitical tensions.
On Wednesday, the Santa Clara-based chipmaker reported $46.7bn (£34.6bn) in second-quarter revenue, a 56% increase compared with the same period in 2024.
Shares fell in after-hours trading after executives acknowledged the company was still “working through geopolitical issues.” Nvidia remains entangled in trade tensions between Washington and Beijing.
Rapid policy changes under the Trump administration, aimed at protecting US leadership in artificial intelligence, add further uncertainty to the company’s outlook.
Tech giants drive AI surge
Nvidia’s processors have become essential to powering the global AI boom.
The company highlighted strong demand from Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both firms are rapidly expanding their AI infrastructure.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four major technology firms 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 note Nvidia’s dominant position in the AI chip market. Colleen McHugh, chief investment officer at Wealthify, described the company as “the driving force behind the AI boom.”
She emphasized that Nvidia depends heavily on continuous investment from tech giants. If spending persists, revenue and share prices will keep climbing.
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, exceeding 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 decision followed lobbying from Huang, who persuaded the Trump administration to lift its ban on the H20 chip, developed for Chinese buyers.
The ban had been imposed over concerns the chips could benefit China’s military and domestic AI developers.
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 claim 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is stepping up 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 position as “the bellwether of the AI economy” may depend on whether its robotics expansion secures lasting leadership.
