NVIDIA's Q2 data center revenue recorded the slowest growth amid the generative AI boom, with after-hours stock price dropping by as much as 5%
NVIDIA announced its Q2 financial report for fiscal year 2026, with revenue of $46.7 billion, a year-on-year increase of 56%, but the growth rate is the slowest since the generative AI boom, and the stock price fell by as much as 5% in after-hours trading. Data center revenue was $41.1 billion, slightly below expectations, while GPU computing chip revenue was $33.8 billion, a decrease of 1% quarter-on-quarter. Adjusted earnings per share were $1.05, with a net profit of $26.42 billion. The company expects a median revenue of $54 billion for the next quarter, exceeding market expectations
According to the Zhitong Finance APP, American chip giant NVIDIA (NVDA.US) announced its financial report for the second quarter of fiscal year 2026 ending in July on Wednesday. The company's revenue and earnings per share both exceeded market expectations and provided strong guidance for the next quarter, but investors clearly expected more, leading to a drop of 5% in after-hours trading following the report's release. Other chip stocks were also dragged down, with Advanced Micro Devices (AMD) falling 1.7% in after-hours trading and Broadcom (AVGO.US) down 1.3%. However, NVIDIA's stock price has risen about 35% since the beginning of this year, far exceeding the 12% increase in the Nasdaq index during the same period.
The company's Q2 revenue was $46.7 billion, surpassing market expectations of $46.05 billion, and representing a year-on-year increase of 56%, but marking the slowest growth rate since the generative AI boom began in 2023.
The data center business remains NVIDIA's growth engine, with Q2 revenue of $41.1 billion, a year-on-year increase of 56%, but slightly below analysts' estimates of $41.3 billion. This marks the second consecutive quarter of missing Wall Street expectations. Among these, revenue from GPU computing chips was $33.8 billion, a decrease of 1% quarter-on-quarter, mainly due to the lack of shipments of H20 chips to China, resulting in a reduction of about $4 billion in sales. Revenue from networking chips was $7.3 billion, nearly doubling year-on-year. Sales of the latest generation Blackwell chips increased by 17% quarter-on-quarter, accounting for 70% of data center revenue, with cumulative sales reaching $27 billion as of May. Major cloud computing customers (Microsoft (MSFT.US), Amazon (AMZN.US), Google (GOOG.US, GOOGL.US), Meta (META.US), etc.) contributed about half of the data center revenue.
Adjusted earnings per share (EPS) were $1.05, exceeding market expectations of $1.01. Net profit was $26.42 billion, a year-on-year increase of 59%, compared to $16.6 billion in the same period last year. The company expects the median revenue range for the next quarter to be $54 billion (±2%), higher than the market expectation of $53.4 billion.
NVIDIA's Chief Financial Officer Colette Kress stated during the earnings call that the company expects global artificial intelligence infrastructure spending to reach $3 to $4 trillion by the end of this century, indicating that the AI wave is still in its early stages of explosion.
NVIDIA announced that its board of directors has approved a new $60 billion stock repurchase plan, with no expiration date. In the second quarter, the company repurchased $9.7 billion in stock. As of the end of the quarter, there remains $14.7 billion under the old authorization
