Nvidia continues to post rapid growth as global demand for artificial intelligence rises, even while political tensions cloud its outlook.
On Wednesday, the California-based chipmaker reported $46.7bn (£34.6bn) in revenue for the second quarter, a 56% jump compared with the same period in 2024.
Its shares, however, slipped in after-hours trading as the company admitted it was still “working through geopolitical issues”. Nvidia remains caught in the trade battle between Washington and Beijing.
Shifting policies from the Trump administration, designed to secure America’s lead in artificial intelligence, add further uncertainty to the company’s prospects.
Demand from tech giants drives growth
Nvidia’s cutting-edge chips remain at the centre of the AI race.
The company said demand remains strong from major technology players such as Meta, the owner of Instagram, and OpenAI, the creator of ChatGPT. Both firms are pushing to expand their AI capabilities quickly.
“The AI race is now on,” declared Nvidia chief Jensen Huang in a call with analysts. He revealed that four leading tech companies had doubled yearly spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We provide the infrastructure that powers that expansion.”
Industry experts also see Nvidia as indispensable. Colleen McHugh, chief investment officer at Wealthify, described the firm as “the engine of the AI boom”.
She said Nvidia faces little competition in AI chips and relies heavily on continued investment from technology giants. Their spending, she noted, should keep both revenue and the share price climbing.
Revenue from data centres rose 56% to $41.1bn, slightly below analysts’ forecasts. Eileen Burbridge, founding partner of Passion Capital, said the “share price wobble” followed weaker-than-hoped results in this division.
Still, she praised Nvidia’s growth as “unbelievable” while warning that over-enthusiasm could create a bubble.
In July, Nvidia became the first company worldwide valued at $4trn. The firm now expects quarterly revenue of $54bn, ahead of Wall Street predictions.
Political barriers challenge expansion
Despite record-breaking results, Nvidia continues to face political headwinds.
In July, the company said it would restart sales of its high-end AI chips to China. The decision followed lobbying from Huang, which persuaded the Trump administration to overturn its ban on the H20 chip, developed specifically for the Chinese market.
The ban had been imposed amid concerns that the chips could strengthen China’s military and local AI industry.
Executives confirmed that by late July, US officials began reviewing licenses for H20 sales. Some Chinese customers have received approvals, but Nvidia has not yet shipped the chips.
The US government expects to claim 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its Blackwell chips in China, the world’s largest chip market.
At the same time, China is accelerating efforts to build its own semiconductor industry. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s ability to remain “the bellwether of the AI economy” may depend on whether its expansion into robotics secures its long-term role.
