Nvidia Surpasses Revenue and Profit Forecasts Despite Tepid Guidance and Absent China Sales

Nvidia delivered a robust quarter that exceeded Wall Street projections on both top-line and bottom-line metrics, yet the absence of H20 chip sales in China cast a shadow over its performance. For the fiscal quarter ending July 27, 2025, the company reported revenue of USD 46.743 billion, a 56% increase year-over-year that outstripped analyst expectations of USD 46.23 billion and its own forecast of USD 44.1–45.9 billion. Adjusted earnings per share came in at USD 1.05, up 54% from a year earlier and above the USD 1.01 consensus, while non-GAAP gross margin reached 72.7%, modestly ahead of the 72.1% estimate. Operating expenses of USD 3.795 billion rose 36% year-over-year, reflecting continued investment in growth initiatives.

Nvidia’s data center segment generated USD 41.1 billion in revenue, marking a 56% annual gain but narrowly missing the USD 41.29 billion forecast. The sequential slowdown was driven in part by a USD 4 billion reduction in H20 chip sales, as the company did not ship any H20 units to Chinese customers during the quarter. Inventory release of previously ordered H20 chips in other regions contributed USD 180 million, and sales to non-China clients produced approximately USD 650 million in revenue. Meanwhile, data center networking surged, with revenue rising 98% year-over-year to USD 7.3 billion, supported by increased adoption of NVLink architecture and Ethernet AI solutions.

The gaming and AI PC business set a new quarterly record, achieving USD 4.3 billion in sales—a 49% increase that surpassed the previous high by more than 13%. Nvidia attributed this strength to broader availability of its Blackwell architecture products. Professional visualization revenue climbed 32% to USD 601 million, and automotive and robotics sales grew 69% to USD 586 million, although the latter slightly lagged analyst forecasts.

Looking ahead, Nvidia projected third-quarter revenue of USD 54 billion, plus or minus 2%, compared with a USD 53.46 billion analyst consensus and well below some bullish forecasts near USD 60 billion. The company anticipates a non-GAAP gross margin of 73.5%, within a 73–74% range, and operating expenses of USD 4.2 billion—placing full-year expense growth at the high end of its 30%+ target. Notably, this guidance excludes any assumption of H20 chip shipments to China.

During the post-earnings conference call, CEO Jensen Huang expressed confidence that China could represent a USD 50 billion opportunity this year, citing anticipated 50% annual market growth and the “real possibility” of introducing Blackwell-based products to Chinese customers. He also emphasized Nvidia’s competitive edge in delivering comprehensive AI systems rather than standalone chips, highlighting superior energy efficiency and broad cloud presence.

To bolster shareholder returns, Nvidia added USD 60 billion to its stock repurchase authorization. In the first half of fiscal 2026, the company returned USD 24.3 billion through buybacks and dividends, leaving USD 14.7 billion under the previous repurchase plan as of the quarter’s end. The new approval carries no expiration date, signaling continued commitment to capital deployment.