Nvidia CEO Jensen Huang attends the “Winning the AI Race” Summit in Washington D.C., U.S., July 23, 2025.
Kent Nishimura | Reuters
It’s been two years for the reason that explosion of generative synthetic intelligence began to remodel Nvidia’s enterprise. Since then, the chipmaker’s income has greater than tripled and earnings have quadrupled.
Nvidia‘s fiscal second-quarter earnings report, scheduled for Wednesday, will mark the second anniversary of progress, as the corporate shifted from being often called a maker of gaming chips to its present place on the coronary heart of the expertise business.
Last month, Nvidia grew to become the primary firm to hit a $4 trillion market cap, and it is continued to understand in worth. Since the tip of 2022, across the time OpenAI launched ChatGPT and sparked the generative AI boom, Nvidia’s inventory worth is up twelvefold. It’s up 33% this yr, closing on Friday at $177.99.
Growth remains to be substantial for a corporation Nvidia’s measurement, however it has slowed dramatically. After 5 straight quarters of triple-digit growth in 2023 and 2024, income progress dipped to 69% within the fiscal first quarter this yr. Nvidia is predicted to report a year-over-year soar of 53% to $45.9 billion in its second-quarter report, in response to LSEG’s consensus of analyst estimates.
Data heart income within the first quarter accounted for 88% of Nvidia’s whole gross sales, the clearest signal of how vital AI has change into to its enterprise. The firm mentioned that 34% of whole gross sales last year got here from three unnamed clients. Analysts say Nvidia’s high finish customers are main web firms and cloud suppliers reminiscent of Microsoft, Google, Amazon and Meta.
“The assumptions and performance of Nvidia really dictates what the market is going to start to price into the AI trade, and that whole AI trade has essentially been driving the market this past year,” mentioned Melissa Otto, head of Visible Alpha Research at S&P Global, which aggregates Wall Street analysis.
Nvidia makes up about 7.5% of the S&P 500.
Tech’s megacap firms, aside from Nvidia, reported quarterly ends in late July, updating Wall Street on their funding plans. In all, they’re trying to spend roughly $320 billion on AI technology and data center buildouts this yr.
OpenAI, which remains to be personal however has a valuation within the tons of of billions of {dollars}, says it would workforce up with SoftBank and Oracle to spend $500 billion over the subsequent 4 years on the Stargate project, which President Donald Trump introduced in January.
Jensen Huang, co-founder and CEO of Nvidia, shows the brand new Blackwell GPU chip throughout the Nvidia GPU Technology Conference in San Jose, California, on March 18, 2024.
David Paul Morris/Bloomberg by way of Getty Images
Analysts say about half of AI capital spending finally ends up with Nvidia. The firm’s reliance on the so-called hyperscalers leaves it weak to modifications within the macroeconomic surroundings and within the synthetic intelligence business, which stays laborious to foretell.
OpenAI CEO Sam Altman said last week that he believes “investors as a whole are overexcited about AI,” and even mentioned it could possibly be a “bubble.”
But do not count on a pullback but. OpenAI CFO Sarah Friar told CNBC on Wednesday that the corporate “constantly” does not have sufficient computing energy.
As all the time, Wall Street can be paying shut consideration to Nvidia’s steering and different forward-looking commentary from CEO Jensen Huang. For the fiscal third quarter, analysts expect income progress of fifty% to $52.7 billion, in response to LSEG. If Nvidia guides greater and tops estimates for the second quarter, analysts say that form of “beat and raise” may drive AI optimism even greater.
Blackwell ramp
The most vital providing from Nvidia is its Blackwell line, which incorporates particular person graphics processing models and full techniques tying collectively 72 GPUs.
Strong Blackwell numbers would affirm Nvidia’s persevering with technological lead and foothold amongst its key clients, mentioned Ryuta Makino, an analyst at Gamco Investors, which has a stake within the firm.
“It solidifies that hyperscaler spending is still very strong with the Blackwell ramp,” Makino mentioned.
Nvidia mentioned in May that its new product line reached $27 billion in gross sales, accounting for about 70% of knowledge heart income. That’s a steep improve from $11 billion within the prior quarter.
As extra Blackwell chips get put in, specialists anticipate that their superior computing energy will allow firms like OpenAI and Anthropic to create much more succesful AI fashions. OpenAI’s GPT-5, which was introduced earlier this month, was skilled on Nvidia’s last-generation Hopper chips, not the newer Blackwell processors.
Nvidia mentioned final yr that Blackwell could be restricted by provide — what number of chips its companions can construct and ship — and never by demand.
Blackwell Ultra is predicted to start out delivery within the second half of 2025. Nvidia not too long ago pushed again on an analyst report from Asia that mentioned Rubin, the chip expertise anticipated to comprise the majority of GPU gross sales in 2027, was seeing early manufacturing issues.
One seen signal of Nvidia’s rise is Huang’s worldwide fame. He’s repeatedly name-checked by Trump and throughout the quarter traveled to fulfill with enterprise leaders and officers in Taiwan, China, Germany, England and Saudi Arabia.
Huang not too long ago struck a deal with Trump to regain entry to the Chinese market. Nvidia can pay 15% of its China chip income to the U.S. authorities in change for licenses to export its China-focused AI chip known as the H20, Trump said this month. The president added that he’d requested for 20%, however Huang bargained him down.
The H20 is price lots to Nvidia. The chip would have contributed about $8 billion in gross sales within the second quarter, Nvidia said in May, earlier than the U.S. authorities mentioned it could require a license to ship it to China, successfully shutting off gross sales.
Nvidia didn’t embody any H20 gross sales in its steering for the second quarter, and analysts doubt that it’s going to embody any in its forecast for the present interval, partially as a result of the Chinese authorities is pressuring its cloud suppliers to make use of homegrown chips from firms reminiscent of Huawei.
If H20 is included in steering, it may enhance income expectations by about $2 billion to $3 billion, in response to analysts at KeyBanc, who advocate shopping for the inventory. But they mentioned they count on Nvidia to utterly exclude it, following Advanced Micro Devices’ lead from early August.
“Additionally, given a potential 15% tax on AI exports and pressure from the China government for its AI providers to use domestic AI chips, we expect management to guide conservatively,” the KeyBanc analysts wrote.
Nvidia is engaged on a new China AI chip primarily based on Blackwell that might additionally probably want the president’s approval.
“I’m sure he’s pitching the president all the time,” Commerce Secretary Howard Lutnick said about Huang final week on CNBC’s “Squawk on the Street.”
WATCH: CNBC’s interview with Commerce Secretary Howard Lutnick
