Nvidia Doubles Down on AI: Profit Soars, Yet Traders Take a Breather

Sep 1 - Last week,Nvidia NVDA posted Q2'26 results that show robust demand for AI chips but also left some investors cautious. The company reported revenue of $46.7 billion, up 56% year-over-year, and non-GAAP EPS of $1.05 versus the $1.01 consensus. Net income rose to $25.7 billion, or $1.05 per share, from $16.6 billion a year earlier. Management set revenue guidance around $54 billion, plus or minus 2%, topping the Street's $53.1 billion expectation.

The data center business remains the dominant driver, producing $41.1 billion for the quarter, roughly 88% of total revenue. That figure sits just below the $41.3 billion analysts expected and likely explains some of the initial market pullback after hours. Within data center sales, compute revenue rose 50% year-over-year while networking showed sharp sequential gains. Blackwell architecture contributes meaningfully: Blackwell revenue climbed 17% sequentially and now accounts for about half of data center sales.

Management highlighted continued Blackwell adoption across cloud customers and flagged China as a large, still-uncertain market opportunity. The company reports no direct chip sales to China this quarter but recognized $180 million of H20 inventory to a non-China customer; licensing and export developments remain variables going forward. Nvidia also carried a gross margin of 72.4% and reiterated a target for mid-70s margins in FY26.

Valuation discussions followed the print: the stock trades at elevated multiples, and any future beats or misses could influence broader AI and semiconductor sentiment.

Still, many investors view the quarter as a confirmation of sustained AI demand, while others see the guidance and China uncertainty as reasons for caution. Either way, Nvidia's results will likely shape expectations for suppliers, hyperscalers, and chipmakers across the sector.

Is NVDA Stock a Buy?