Nvidia Q2 Earnings Beat Tempered by AI Growth Concerns, China Trade Risks

Nvidia reported record revenue and profits for the second quarter of 2025, with a 56% year-over-year revenue increase to $46.7 billion and adjusted earnings per share of $1.05, beating analyst expectations. Despite strong earnings, shares slipped due to the data center division narrowly missing forecasts and concerns over a slowdown in AI-driven growth, particularly as Nvidia projected $54 billion in third-quarter revenue, below some high-end estimates. A significant challenge for Nvidia is the lack of H20 chip sales to China, caused by U.S. export restrictions and geopolitical tensions, potentially reducing revenue by $4 to $8 billion and resulting in a new deal requiring Nvidia to surrender 15% of its China chip revenue to the government. CEO Jensen Huang emphasized continued strong demand and technological advances like the Blackwell Ultra platform, but investors remain wary about the impact of regulatory constraints and growth sustainability. Nvidia also announced a $60 billion stock repurchase program, signaling confidence despite near-term headwinds. The company remains the world’s most valuable, with a market cap above $4 trillion, supported by ongoing investments from major tech firms in its AI infrastructure.