Nvidia reported strong second-quarter 2026 results, surpassing Wall Street expectations with adjusted earnings per share of $1.05 against an estimated $1.01, and revenue reaching $46.74 billion compared to the $46.06 billion forecast. Despite these robust figures, particularly a 56% year-over-year increase in data center revenue to $41.1 billion, Nvidia's stock fell 3.2% in after-hours trading, disappointing investors accustomed to even larger beats.
The primary reason for the lukewarm investor reaction was the absence of H20 chip sales to China. Nvidia reported no H20 sales to Chinese customers during the quarter, although it did release $180 million worth of H20 inventory to a customer outside of China. CFO Colette Kress indicated potential H20 sales to China could range from $2 billion to $5 billion if geopolitical conditions permit, but a lack of formal U.S. regulations regarding an unconventional arrangement with the Trump administration led to this uncertainty.
Looking ahead, Nvidia projected Q3 revenue of approximately $54 billion, plus or minus 2%, which is slightly above analysts' expectations of $53.1 billion. However, this forecast explicitly excludes potential H20 sales to China, contributing to investor caution. The company's net income significantly increased by 59% to $26.42 billion, or $1.08 per share, from $16.6 billion in the prior year. The data center division, fueled by demand from large cloud providers and sales of its Blackwell chips, continues to be the main growth engine, with Blackwell sales alone accounting for $27 billion.
