NVIDIA delivered a blockbuster performance in its second quarter of fiscal year 2026, recording $46.7 billion in revenue — a 56% increase year-on-year and a 6% gain quarter-on-quarter. This achievement underscores the company’s continued dominance in artificial intelligence hardware, even as geopolitical headwinds cloud its China-focused growth.
Segment Breakdown & Margins
The Data Center segment remains the engine of growth, generating $41.1 billion, a rise of 56% year-over-year and 5% sequentially, powered by overwhelming demand for AI compute.
NVIDIA’s GAAP gross margin stood at 72.4%, with non-GAAP gross margin at 72.7%. When excluding a $180 million release of reserved H20 inventory, non-GAAP gross margin remains close at 72.3%.
On profitability, GAAP earnings per diluted share climbed to $1.08, and non-GAAP earnings reached $1.05. Removing the H20-related inventory boost yields a non-GAAP EPS of approximately $1.04.
Other Business Segments
- Gaming: $4.3 billion, up 49% YoY and 14% sequentially, boosted by the record-ramping RTX 5060 GPU.
- Professional Visualization: $601 million, up 32% YoY and 18% sequentially.
- Automotive & Robotics: $586 million revenue, surging 69% YoY.
Shareholder Returns & Buybacks
NVIDIA returned $24.3 billion through stock repurchases and dividends during the first half of FY2026. On August 26, the company’s board authorized an additional $60 billion for stock buybacks. A quarterly cash dividend of $0.01 per share will be paid to shareholders of record as of September 11.
Quarterly Outlook & Market Reaction
For the upcoming quarter, NVIDIA projects $54 billion in revenue (±2%), surpassing analysts’ estimates. However, the forecast notably excludes any potential sales from the H20 chip in China, a market beset by export restrictions.
Following the earnings release, NVIDIA’s stock dropped approximately 2–5% in after-hours and premarket trading, weighed down by uncertainty over China exposure and a slight miss in data center revenue expectations.
CEO Jensen Huang reaffirmed confidence in long-term AI infrastructure demand, pointing to significant ongoing investments from cloud-heavy hitters and sovereign AI initiatives.
Summary at a Glance
- Q2 Revenue: $46.7 billion (+56% YoY, +6% QoQ)
- Data Center: $41.1 billion (+56% YoY)
- EPS: $1.08 GAAP; $1.05 non-GAAP
- Q3 Forecast: $54 billion (±2%), excluding China H20 sales
- Market Reaction: Shares dip amid China and growth concerns
- Buybacks: $60 billion added authorization, $24.3 billion already returned
NVIDIA's extraordinary Q2 results reaffirm its leadership in AI hardware, though market attention has shifted toward China policy uncertainty. With a strong product pipeline and shareholder-friendly capital strategy, the tech giant appears ready for whatever lies ahead.
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