Aug. 28 (UPI) — Revenue at the giant U.S. semiconductor-maker Nvidia jumped 56% to $47.4 billion in the April to June quarter compared with the same period in 2024, despite no shipments whatsoever of its flagship AI chip to China-based customers.
The results reported by the Santa Clara, Calif., firm on Wednesday managed to edge expectations by a $68 million margin with NVIDIA saying sales growth would hold above 50% in the current quarter, reassuring the market that demand for AI infrastructure will remain strong.
However, the performance was the weakest in nine straight quarters of above 50% year-over-year revenue growth, dating back to summer 2023, for the firm whose chips dominate the rapidly expanding data center sector that powers AI.
Nvidia forecast revenue in the July to September quarter to also come in higher than expected at $54 billion, with a margin of error of 2% either way — but noted that the forecast assumed zero sales of its H20 AI chip to China.
Second-quarter profit surged almost 60% to $26.4 billion, compared with the same period in 2024.
The results were in line with expectations that Nvidia is banking on riding a wave from massive demand for the buildout of AI around the world, with Chief Financial Officer Colette Kress saying Nvdia expected spending on AI infrastructure of between $3 trillion and $4 trillion in the coming five years.
The firm pointed to strong demand, particularly from the U.S. big tech firms as the likes of Meta and OpenAI, the developer of ChatGPT, battle it out in the competition to scale up AI.
Nvidia CEO Jensen Huang said annual spending on the technology by the big four players had jumped by 100% to $600 billion.
“The AI race is now on. Over time, you would think that artificial intelligence would accelerate GDP growth. Our contribution to that is a large part of the AI infrastructure.”
However, the investors appeared disappointed with the performance, with the share price dipping by more than 2% in out-of-hours trading overnight following a week-long rally. Three hours before the NASDAQ exchange was due to open at 9:30 a.m. EDT, the stock was changing hands at $178, down $3.55.
Eileen Burbridge of Passion Capital in London blamed the share price “wobble” on revenue from Nvidia’s data centers arm, which accounts for almost 90% of its business, “not posting results as strong as it was hoping.”
“There’s clearly been so much capital that’s gone in that I don’t think it’s unfair to say there’s been maybe too much exuberance or a bit of a bubble,” she added.
NVIDIA made no mention of negotiations with the Trump administration to lift a ban on selling the H20 chip to China, saying only that it “continued to work through geopolitical issues.”
Earlier in August, Nvidia and rival chipmaker Advanced Micro Devices reached an “unprecedented” deal with the government to share 15% of their sales to China with the U.S. treasury in exchange for export licenses to ship their advanced H20 and MI308 semiconductors.
The administration was said to have begun issuing licenses to both companies, days after Huang met with Trump in the White House on Aug. 6.
Analysts had predicted Nvidia would ship 1.5 million H20s worth $23 billion to China this year until Trump imposed his ban in June as AI became the latest bargaining chip in his trade spat with China.
Nvidia developed the H20 chip specifically for the Chinese market after President Joe Biden imposed sweeping export controls on advanced AI chips for 2023. Before Trump’s ban, analysts estimated Nvidia would ship 1.5 million H20s this year, worth $23 billion.
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