Nvidia continues to accelerate as demand for artificial intelligence rises, though global political frictions pose serious challenges.
On Wednesday, the chipmaker reported $46.7bn (£34.6bn) in second-quarter revenue, a 56% increase compared with the same period in 2024.
Despite the strong numbers, its shares fell in after-hours trading after executives admitted the company was still “working through geopolitical issues”. Nvidia remains heavily exposed to trade disputes between Washington and Beijing.
Shifting US policies under the Trump administration, aimed at preserving America’s lead in artificial intelligence, add more uncertainty for the company.
Strong appetite for AI chips
Nvidia’s processors are at the heart of the global AI boom.
The firm said demand remains particularly strong from major technology players such as Meta, the parent of Instagram, and OpenAI, the developer of ChatGPT. Both are racing to expand their artificial intelligence capacity.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four leading technology firms had doubled their yearly spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang said. “We provide the infrastructure that makes this possible.”
Analysts confirmed Nvidia’s leading role. Colleen McHugh, chief investment officer at Wealthify, described the company as “the engine of the AI boom”.
She highlighted Nvidia’s dependence on continued investment from technology giants. Ongoing spending, she said, would support higher revenue and share prices.
Revenue from data centres rose 56% to $41.1bn, though results fell slightly below analyst forecasts. Investor Eileen Burbridge, founding partner of Passion Capital, said this “share price wobble” came from weaker-than-expected performance in that division.
Even so, she praised Nvidia’s growth as “unbelievable” while warning that too much enthusiasm risked creating a bubble.
In July, Nvidia became the first company in the world valued at $4trn. The firm now projects quarterly revenue of $54bn, beating Wall Street expectations.
Tensions cast a shadow
Despite record-breaking performance, Nvidia continues to face serious political obstacles.
In July, the company said it would resume sales of its high-end AI chips to China. The announcement followed lobbying by Huang, who convinced the Trump administration to reverse its ban on the H20 chip, designed specifically for the Chinese market.
The ban had been imposed over fears that the chips could support China’s military as well as its domestic AI sector.
Executives revealed that by late July, US officials had begun reviewing licenses for H20 sales. Some Chinese firms secured approvals, but Nvidia has not yet shipped any chips.
The US government expects 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its current forecast and continues pressing for permission to sell its Blackwell chips in China, the largest chip market worldwide.
Meanwhile, Beijing is accelerating efforts to strengthen its semiconductor industry. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s long-term role as “the bellwether of the AI economy” may depend on whether its expansion into robotics secures its leadership.
