Nvidia continues to grow rapidly as artificial intelligence demand soars, even while political disputes create uncertainty for its future.
On Wednesday, the US chip designer reported revenue of $46.7bn (£34.6bn) for the second quarter, marking a 56% rise from the same period in 2024.
Despite the strong results, shares slipped in after-hours trading after the firm admitted it was still “working through geopolitical issues”. The company remains entangled in the trade battle between Washington and Beijing.
Fast-changing rules from the Trump administration, intended to secure America’s lead in artificial intelligence, add further pressure on Nvidia.
AI demand drives record sales
Nvidia’s advanced chips remain central to the global race in artificial intelligence.
The company confirmed strong demand from major technology giants including Meta, the owner of Instagram, and OpenAI, the creator of ChatGPT. Both firms are expanding their AI capacity at speed.
“The AI race is now on,” said Nvidia boss Jensen Huang in a call with analysts. He revealed that four leading technology firms had doubled annual spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We provide the infrastructure that powers this change.”
Experts highlighted Nvidia’s dominance. Colleen McHugh, chief investment officer at Wealthify, described the company as “the leader of the AI boom”.
She noted Nvidia’s reliance on ongoing spending by technology giants. Continued investment, she explained, would keep revenue and the share price climbing.
Revenue from data centres rose 56% to $41.1bn, though slightly below analysts’ expectations. Investor Eileen Burbridge, founding partner of Passion Capital, said weaker-than-expected results in this division led to the “share price wobble”.
Even so, she called Nvidia’s growth “unbelievable” but warned that too much enthusiasm could create a bubble.
In July, Nvidia became the first company worldwide to reach a $4trn valuation. The firm now expects $54bn in quarterly revenue, ahead of Wall Street forecasts.
Political challenges weigh heavily
Despite record-breaking figures, Nvidia faces mounting political risks.
In July, the company confirmed plans to resume sales of its high-end AI chips to China. The decision followed lobbying from Huang, who persuaded the Trump administration to lift its ban on the H20 chip, designed specifically for Chinese buyers.
The ban had been imposed amid concerns that the chips could benefit China’s military as well as its AI developers.
Executives said that late in July, US authorities began reviewing licenses for H20 sales. Some Chinese clients received approvals, but Nvidia has not shipped any chips yet.
The US government expects to collect 15% of revenue from licensed H20 transactions. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its Blackwell chips in China, the largest chip market in the world.
Meanwhile, China is racing to strengthen its domestic semiconductor industry. “US export restrictions are fuelling local chipmaking in China,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s ability to stay “the bellwether of the AI economy” may depend on whether its expansion into robotics secures its long-term role.
