Earnings Call Insights: NVIDIA Corporation (NVDA) Q2 2026
Management View
- Colette M. Kress, Executive VP & CFO, stated “We delivered another record quarter while navigating what continues to be a dynamic external environment. Total revenue was $46.7 billion, exceeded our outlook as we grew sequentially across all market platforms. Data center revenue grew 56% year-over-year. Data center revenue also grew sequentially despite the $4 billion decline in H20 revenue. NVIDIA’s Blackwell platform reached record levels, growing sequentially by 17%. We began production shipments of GB300 in Q2.”
- Kress highlighted that “The GB200 NVL system is seeing widespread adoption with deployments at CSPs and consumer Internet companies. Lighthouse model builders, including OpenAI, Meta and Mistral are using the GB200 NVL72 at data center scale for both training, next-generation models and serving inference models in production.”
- Kress reported “The new Blackwell Ultra platform has also had a strong quarter, generating tens of billions in revenue.”
- Kress noted “In late July, the U.S. government began reviewing licenses for sales of H20 to China customers. While a select number of our China-based customers have received licenses over the past few weeks, we have not shipped any H20 based on those licenses.”
- Kress further added “We expect widespread market availability in the second half of the year as CoreWeave prepares to bring their GB300 instance to market as they are already seeing 10x more inference performance on reasoning models compared to H100.”
- CEO Jen-Hsun Huang stated that “The scale and scope of these build-outs present significant long-term growth opportunities for NVIDIA. We see $3 trillion to $4 trillion in AI infrastructure spend by the end of the decade.”
- Kress quoted “Networking delivered record revenue of $7.3 billion, and escalating demands of AI compute clusters necessitate high efficiency and low latency networking. This represents a 46% sequential and 98% year-on-year increase with strong demand across Spectrum-X Ethernet, InfiniBand and NVLink.”
Outlook
- Kress shared “Total revenue is expected to be $54 billion, plus or minus 2%. This represents over $7 billion in sequential growth. Again, we do not assume any H20 shipments to China customers in our outlook. GAAP and non-GAAP gross margins are expected to be 73.3%, 73.5%, respectively, plus or minus 50 basis points. We continue to expect to exit the year with non-GAAP gross margins in the mid-70s. GAAP and non-GAAP operating expenses are expected to be approximately $5.9 billion and $4.2 billion, respectively. For the full year, we expect operating expenses to grow in the high 30s range year-over-year, up from our prior expectations of the mid-30s.”
- Kress stated “We are accelerating investments in the business to address the magnitude of growth opportunities that lie ahead.”
Financial Results
- Kress reported “Total revenue was $46.7 billion, exceeded our outlook as we grew sequentially across all market platforms.”
- Kress stated “Networking delivered record revenue of $7.3 billion, and escalating demands of AI compute clusters necessitate high efficiency and low latency networking.”
- Kress shared “Our gaming revenue was a record $4.3 billion, a 14% sequential increase and a 49% jump year-on-year.”
- Kress highlighted “Professional Visualization revenue reached $601 million, a 32% year-on-year increase.”
- Kress noted “Automotive revenue, which includes only in-car compute revenue, was $586 million, up 69% year-on-year, primarily driven by self-driving solutions.”
- Kress reported “GAAP gross margin was 72.4% and non-GAAP gross margin was 72.7%. These figures include a $180 million or 40 basis point benefit from releasing previously reserved H20 inventory.”
- Kress added “To support the ramp of Blackwell and Blackwell Ultra, inventory increased sequentially from $11 billion to $15 billion in Q2.”
- Kress shared “In Q2, we returned $10 billion to shareholders through share repurchases and cash dividends. Our Board of Directors recently approved a $60 billion share repurchase authorization to add to our remaining $14.7 billion of authorization at the end of Q2.”
Q&A
- Christopher James Muse, Cantor Fitzgerald: “I was hoping perhaps could you take a high-level view and speak to your vision for growth into 2026. And as part of that, if you can kind of comment between network and data center would be very helpful.” Jen-Hsun Huang: Described agentic AI and the scale of opportunity, stating “Over the next 5 years, we’re going to scale into with Blackwell, with Rubin and follow-ons to scale into effectively a $3 trillion to $4 trillion AI infrastructure opportunity.”
- Vivek Arya, Bank of America Securities: “What needs to happen? And what is the sustainable pace of that China business as you get into Q4?” Kress: “There is interest in our H20s… we’re still waiting on several of the geopolitical issues… we’re not exactly sure what that full amount will be this quarter.”
- Benjamin Alexander Reitzes, Melius Research: Sought clarification on infrastructure spend and NVIDIA’s share. Huang: Explained the company’s role in AI infrastructure, saying “Out of a gigawatt AI factory, which can go anywhere from $50 billion to plus or minus 10%, let’s say, $50 billion to $60 billion, we represent about $35 billion plus or minus of that.”
- Joseph Lawrence Moore, Morgan Stanley: Asked about China opportunity. Huang: Estimated “the China market, I’ve estimated to be about $50 billion of opportunity for us this year if we were able to address it with competitive products.”
- Aaron Christopher Rakers, Wells Fargo: Inquired on Spectrum-XGS. Huang: “Spectrum-X, as we mentioned earlier, is now quite a sizable business, and it’s only about 1.5 years old. So Spectrum-X is a home run.”
- Stacy Aaron Rasgon, Bernstein Research: On segment growth. Kress: “Blackwell is still going to be the lion’s share of what we have in terms of data center.”
- James Edward Schneider, Goldman Sachs: On Rubin product transition. Huang: “Rubin is going to have a whole bunch of new ideas.”
- Timothy Michael Arcuri, UBS: On data center revenue growth. Huang: “We have reasonable forecasts from our large customers for next year, a very, very significant forecast.”
Sentiment Analysis
- Analysts pressed for details on China, product transitions, and segment growth, with a generally optimistic but probing tone, as seen in repeated follow-ups on China exposure and infrastructure scale.
- Management consistently projected confidence during both prepared remarks and Q&A, with Huang emphasizing the “extraordinary milestone” and “record-breaking year,” while Kress addressed uncertainties around China and growth investments directly, maintaining composure and assurance.
- Compared to the previous quarter, analysts’ tone remained constructive but focused more on the sustainability of growth, China regulatory headwinds, and upcoming product transitions.
- Direct confidence was expressed by management through statements such as “We see $3 trillion to $4 trillion in AI infrastructure spend by the end of the decade” (Huang).
Quarter-over-Quarter Comparison
- Guidance for the next quarter was raised in both revenue and margin expectations, with Q2 revenue at $46.7 billion and Q3 guidance at $54 billion, plus or minus 2%.
- Blackwell and GB300 production ramped further than in Q1, transitioning from initial shipments to full production and broader adoption.
- China-related regulatory issues remain, but this quarter included potential for resumed H20 shipments if geopolitics allow, while prior quarter discussed inventory write-offs and full cessation.
- Networking revenue accelerated further, with Spectrum-X annualizing over $10 billion and record growth cited, compared to $8 billion in the prior quarter.
- Operating expenses guidance increased, reflecting an accelerated investment pace versus the prior expectation of mid-30s% growth.
- Management tone remained confident, but with more explicit acknowledgment of geopolitical uncertainty and supply chain ramping successes.
- Analysts’ focus shifted from early Blackwell ramp and China write-offs in Q1 to large-scale infrastructure opportunities and product cadence in Q2.
Risks and Concerns
- Kress highlighted ongoing geopolitical uncertainty around H20 sales to China, stating “we have not shipped any H20 based on those licenses.”
- The Q3 revenue outlook does not assume H20 shipments to China customers, and management noted “If geopolitical issues reside, we should ship $2 billion to $5 billion in H20 revenue in Q3.”
- Kress discussed increased inventory and operating expenses to support Blackwell ramp, with potential risks if demand or supply chain execution falters.
- Regulatory and export control risks continue to be referenced, particularly in relation to China and U.S. government licensing.
Final Takeaway
NVIDIA management emphasized the company’s record-setting performance in Q2 2026 and outlined a path toward substantial growth driven by AI infrastructure, with a projected $3 trillion to $4 trillion global opportunity through the decade. The full-scale ramp of Blackwell and GB300 platforms, robust networking growth, and continued demand across data center, gaming, professional visualization, and automotive segments underscore the company’s leadership position. While regulatory uncertainty regarding China persists, NVIDIA is accelerating investments and expects further revenue and margin expansion as AI adoption broadens globally.