For the second quarter, the chipmaker reported $46.7 billion in revenue, representing a 56% jump from the same period last year. Net income also surged to $26.4 billion, up 59% year-on-year. 

The results, which is more than the initial projection, reveal just how much the company has become the backbone of the artificial intelligence growth.

Data centre sales, the largest driver of growth, pulled in $41.1 billion, with the new Blackwell generation of chips accounting for $27 billion alone. “Blackwell is the AI platform the world has been waiting for,” CEO Jensen Huang said. “The AI race is on, and Blackwell is the platform at its centre.”

Huang spoke on his long-term outlook, projecting a $3 to $4 trillion wave of AI infrastructure spending by 2030. “$3 to 4 trillion is fairly sensible for the next five years,” he told analysts on the call.

Beyond the financials, Nvidia underlined its central role in OpenAI’s release of open-source gpt-oss models earlier this month, noting that its Blackwell GB200 NVL72 rack system processed 1.5 million tokens per second during the launch.

However, not all markets are open doors, as the company admitted that it sold zero units of its China-focused H20 chip in the past quarter. Instead, $650 million worth of those devices went to a buyer outside China. 

The lack of shipments comes from a murky U.S. policy under President Trump, which currently allows Nvidia to sell advanced GPUs to China if it pays a 15% export tax. Legal scholars have criticised the arrangement as an “unconstitutional abuse of power.”

Nvidia’s Chief Financial Officer, Colette Kress, stressed the company’s hesitation: “While a select number of our China-based customers have received licences over the past few weeks, we have not shipped any H20 devices based on those licences.”

Adding to the issue, Beijing has discouraged local firms from using Nvidia’s chips, a move that reportedly pushed the company to halt production of the H20 earlier this month.

In future plans, Nvidia has guided for $54 billion in revenue in the third quarter, though it warned that figure does not include any Chinese shipments. The guidance was broadly in line with Wall Street expectations, but fell short of more bullish analyst forecasts of over $60 billion.

Despite the blockbuster earnings and the announcement of a $60 billion stock buyback, Nvidia’s shares slid about 3% in post-market trading.

The dip reflected disappointment over a narrow miss in data centre revenue, a segment that investors have been watching closely as a proxy for the strength of the AI boom.

The setback, primarily tied to the halted shipments of its H20 chip, the only advanced AI processor previously cleared for Chinese markets, has led to fresh investigations of U.S. trade policy and its unintended consequences.

CEO Jensen Huang said, “We walked away from $15 billion worth of business in China,” revealing that the export curbs have left Nvidia without access to a market he estimates will be worth $50 billion in 2025.

The H20 chip, now effectively off-limits, was at the heart of Nvidia’s operations in China, which made up 13% of its revenue last year. Analysts at Wedbush now question whether Nvidia can scale other sales channels quickly enough to compensate. 

“The primary question around results and guidance is can Nvidia lift sales enough to offset the loss of H20 or China business,” they wrote in a pre-earnings note.

The timing of these curbs couldn’t be worse. In the last three weeks of the April quarter alone, Susquehanna estimates Nvidia lost $1 billion in revenue due to the policy change. 

For the rest of the year, quarterly losses could range from $3 billion to $4.5 billion. Gross margin is expected to plunge more than 11 points, falling to 67.7%, with the H20-related write-downs responsible for as much as 12.5% of that decline.

This collapse in Chinese business has coincided with a bigger dip in investor confidence. Nvidia’s stock is already down 2% this year, despite a near 200% rally in 2023. Market watchers now view the Chinese market as a swing factor for upcoming quarters. “China will probably be the biggest swing factor for Nvidia’s quarter,” said D.A. Davidson analyst Gil Luria.

In an effort to salvage its position, Nvidia is reportedly preparing to launch a new AI chip for China based on its cutting-edge Blackwell architecture, at a lower price point, between $6,500 and $8,000, compared to the $10,000–$12,000 H20. 

But regaining ground won’t be easy. Nvidia’s market share in China has already plummeted from 95% before 2022 to around 50%, largely due to U.S. intervention.

Huang has warned that the restrictions have done little to slow China’s technological rise. On the contrary, “U.S. semiconductor curbs on China are a failure,” he said, noting that firms like Huawei have accelerated domestic chip development, increasing competitive pressure on Nvidia.

Washington, however, is revisiting some aspects of its export control framework. Adjustments to the Biden-era “AI diffusion rule” could unlock new sales opportunities in regions like the Middle East.

Still, these gains will be marginal in the short term. Analysts believe revenue from those geographies will be limited initially, though the long-term potential is significant.

To that end, Nvidia has already secured a massive deal in Saudi Arabia, agreeing to supply hundreds of thousands of AI chips, including 18,000 Blackwell units, to a startup backed by the country’s sovereign wealth fund. This move comes as part of trade engagements between the U.S. and Gulf nations.

At home, there are also concerns about AI infrastructure costs, which have dented Nvidia’s stock performance. Even as tech giants like Google reaffirm their commitment to AI investments, market opinion has changed.

“I don’t think investors expectations are very high as we go into it,” said Ivana Delevska, chief investment officer of Spear Invest, which holds Nvidia shares. Recent earnings beats have narrowed, and Nvidia may no longer be the consistent overperformer it once was.

Nvidia will report its quarterly results on Wednesday. All eyes will be on whether the company can turn policy-induced setbacks into an opportunity, or whether this is the start of a more challenging chapter in its global expansion.