Nvidia has posted record earnings driven by the explosive rise of artificial intelligence, even as political tensions cloud its outlook.
On Wednesday, the Santa Clara-based firm reported $46.7bn (£34.6bn) in second-quarter revenue, a 56% leap compared with the same period in 2024.
Despite the surge, shares slipped in after-hours trading after executives admitted the company was still “working through geopolitical issues”. Nvidia remains at the heart of the trade dispute between Washington and Beijing.
Frequent policy shifts from the Trump administration, designed to safeguard US dominance in artificial intelligence, have created further uncertainty.
Growing appetite from tech leaders
Nvidia’s chips remain the backbone of the global AI race.
The company highlighted strong demand from Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both are expanding their AI projects at unprecedented speed.
“The AI race is now on,” said Nvidia boss Jensen Huang during a call with analysts. He revealed that four major technology companies had doubled annual spending to $600bn.
“Artificial intelligence will drive GDP growth over time,” Huang added. “We are delivering the infrastructure to power that growth.”
Analysts say Nvidia dominates the market without serious rivals. Colleen McHugh, chief investment officer at Wealthify, described the firm as “the centre of the AI boom”.
She warned, however, that the company’s reliance on large technology firms makes it vulnerable to shifts in spending. If investment continues, Nvidia’s revenue and share price will keep climbing.
Data centre revenue rose 56% to $41.1bn but fell short of Wall Street forecasts. Investor Eileen Burbridge, founding partner of Passion Capital, said this weaker result caused the “share price wobble”.
Even so, she called Nvidia’s growth “unbelievable” but cautioned that excessive excitement could fuel a bubble.
In July, Nvidia became the world’s first $4trn company. The firm now expects $54bn in third-quarter revenue, surpassing analyst estimates.
Politics test Nvidia’s dominance
Despite record-breaking performance, Nvidia faces growing challenges from international politics.
In July, the company announced it would resume sales of its high-end AI chips to China. The move came after Huang persuaded the Trump administration to reverse its ban on the H20 chip, created specifically for Chinese customers.
The ban had been imposed over fears that the chips could support China’s military and AI industry.
Executives confirmed that by late July, US officials began reviewing licenses for H20 sales. Some Chinese firms received approvals, but Nvidia has not shipped the chips yet.
The US government expects 15% of revenue from licensed H20 transactions. Nvidia excluded the H20 from its forecast and is pushing for approval to sell its new Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is investing heavily in domestic semiconductor production. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s future as “the bellwether of the AI economy” could hinge on whether its expansion into robotics secures its global leadership.
