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Computer-chip giant Nvidia has reported a massive surge in its latest quarterly revenue, a performance that has quieted some of the recent talk of an impending AI bubble burst.
The company announced on Wednesday that its revenue for the second three months of the year reached $46.7 billion, marking an impressive 56% increase from the same period in 2024.
The remarkable growth is largely fuelled by insatiable demand from major tech firms including Meta and OpenAI, which are in a fierce race to expand their AI capabilities.
As Nvidia boss Jensen Huang (pictured above) stated in a call with analysts: “The AI race is now on.” He noted that spending from four of the largest tech companies had doubled to an astonishing $600 billion per year.
Experts are quick to point out Nvidia’s pivotal role. Colleen McHugh, chief investment officer at Wealthify, told the BBC that Nvidia is “at the heart of this AI boom” and is “largely unchallenged in the market for AI chips.” She emphasized that the company’s continued success is deeply intertwined with the spending habits of these tech giants.
Despite its triumphant growth, Nvidia’s stock experienced a slight “wobble” in after-hours trading. This dip came even as the company’s data center revenue surged to $41.1 billion, a figure that still fell slightly short of analysts’ heightened expectations.
Eileen Burbridge of Passion Capital acknowledged the “unbelievable” growth, while also suggesting that the market’s “exuberance” might indicate bubble-like conditions.
The company’s success is also navigating complex geopolitical headwinds. Nvidia continues to deal with tensions between the U.S. and China, a trade war that has seen the company lobbying for licences to sell its high-end H20 chips, specifically designed for the Chinese market.
Executives noted that the U.S. government is now reviewing licenses for these sales, a process that is fuelling China’s domestic efforts to cultivate its own chipmaking industry. In July, Nvidia made headlines by becoming the world’s first $4 trillion company and its projected revenue for the current quarter is $54 billion, signaling continued confidence in its trajectory.
Says Kate Leaman, chief market analyst at AvaTrade:
“Nvidia just posted another monster quarter – revenue and earnings per share exceeded expectations, while the company also announced a jaw-dropping $60 billion share buyback. That’s the kind of signal markets usually love as it says, ‘We’re confident. We’re here to stay’.
“But the stock still dipped after hours – so, what caused this? The mild stock dip wasn’t about failure; rather, it was about expectations. With options traders pricing in a 6% swing, anything short of perfect was going to invite second-guessing. That’s what happens when you’re a $2 trillion AI titan. The bar is just that high. Right now, the market is looking past the headlines. Investors want to know not just how Nvidia performed, but how clearly it can chart the future.
“Yes, the core business is still booming. Demand for AI chips remains intense. Nvidia’s data centre segment, powered by its new Blackwell chips, rose 17% from last quarter and 56% year-over-year. That’s huge. It shows Nvidia is still the beating heart of global AI infrastructure.
“But there are clouds. Nvidia didn’t ship any of its H20 chips to China this quarter. Export restrictions are biting. Management said if those rules ease, it could add $2 to $5 billion in sales next quarter. But that’s a big ‘if’. Markets don’t like uncertainty, especially with geopolitics in the mix.
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