How much revenue did NVIDIA generate in Q2 FY2026?

NVIDIA reported record revenue of $46.74 billion in Q2 FY2026, representing a 56% increase year-over-year and 6% sequential growth. The Data Center segment alone contributed $41.10 billion, accounting for 88% of total revenue.

What is NVIDIA's Q3 FY2026 revenue guidance?

NVIDIA expects Q3 FY2026 revenue of $54.0 billion (plus or minus 2%), which would represent approximately 15.5% sequential growth. The company has not assumed any H20 shipments to China in this guidance and expects to exit the year with non-GAAP gross margins in the mid-70% range.

How are export controls affecting NVIDIA's China business?

Despite U.S. export restrictions, China still represents approximately 20% of NVIDIA's Data Center revenue through sales of compliant products like the H20 chip. However, NVIDIA sold $650 million of H20 inventory to unrestricted customers outside China in Q2, with no H20 sales to China-based customers during the quarter.

What is driving NVIDIA's Data Center growth?

NVIDIA's Data Center growth is driven by unprecedented demand for AI infrastructure from cloud service providers (representing ~50% of Data Center revenue), enterprise AI deployment, and sovereign AI initiatives globally. Major hyperscalers like Amazon Web Services, Microsoft Azure, and Google Cloud continue investing heavily in NVIDIA's Hopper architecture while beginning adoption of the newer Blackwell platform.

Is NVIDIA stock overvalued at current levels?

NVIDIA trades at a forward P/E of approximately 35x and a PEG ratio of 0.8x, which appears elevated compared to traditional semiconductor companies. However, these multiples reflect NVIDIA's dominant position in the high-growth AI infrastructure market, with management describing it as a multi-trillion dollar opportunity. Investors should consider both the growth potential and risks including regulatory changes, emerging competition, and historical semiconductor cyclicality.

Resources > Blog > Economy > NVIDIA Q2 Fiscal 2026 Earnings: AI Dominance Continues Despite Export Headwinds

NVIDIA Q2 Fiscal 2026 Earnings: AI Dominance Continues Despite Export Headwinds

August 27, 2025

NVIDIA Corporation (NASDAQ: NVDA) reported its second quarter fiscal 2026 earnings results after market close today, delivering another quarter of exceptional growth driven by unprecedented demand for artificial intelligence infrastructure. The chip giant’s results demonstrate continued dominance in AI accelerated computing despite navigating export control challenges.

The Numbers: Breaking Records Again

NVIDIA’s Q2 FY2026 performance exceeded already lofty expectations:

Metric	Q2 FY2026	Q1 FY2026	Q2 FY2025	YoY Change
Total Revenue	$46.74B	$44.06B	$30.04B	+56%
Data Center Revenue	$41.10B	$39.11B	$26.27B	+56%
Gaming Revenue	$4.29B	$3.76B	$2.88B	+49%
Gross Margin (Non-GAAP)	72.7%	61.0%	75.7%	-3.0 pts
EPS (Non-GAAP)	$1.05	$0.81	$0.68	+54%
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Revenue soared to $46.7 billion, marking a 56% year-over-year increase and 6% sequential growth. Non-GAAP earnings per share hit $1.05, substantially beating consensus estimates. Perhaps most impressively, the company maintained a robust 75.5% non-GAAP gross margin, underscoring its pricing power in the white-hot AI chip market.

For comprehensive NVIDIA financial analysis and peer comparisons, YCharts provides detailed metrics and visualization tools to track these remarkable trends.

Data Center Dominance Continues

The Data Center segment remains NVIDIA’s crown jewel, generating $41.1 billion in revenue, up 56% year-over-year and representing a staggering 88% of total company revenue. This performance reflects insatiable demand from cloud service providers and enterprises racing to build AI infrastructure.

Major hyperscalers including Amazon Web Services, Microsoft Azure, and Google Cloud continued their massive investments in NVIDIA’s Hopper GPU architecture while beginning adoption of the newer Blackwell platform.

Geographic Revenue Mix Shows Global AI Buildout

The Data Center segment’s geographic distribution reveals the global nature of the AI infrastructure buildout:

United States: 45% of Data Center revenue
China: 20% (despite export restrictions)
Europe: 18%
Other Asia-Pacific: 17%

Gaming Makes a Comeback

While AI dominates the narrative, NVIDIA’s Gaming segment demonstrated significant recovery with $4.3 billion in revenue, up 49% year-over-year and 17% sequentially. The RTX 40 Series continues performing strongly, benefiting from new game launches optimized for ray tracing and improved channel inventory levels.

Navigating the China Challenge

NVIDIA continues threading the needle on U.S. export controls affecting China sales. The company’s China-compliant products, including the H20 chip, maintain solid demand despite regulatory constraints. China still represents approximately 20% of Data Center revenue, highlighting NVIDIA’s ability to serve this critical market within regulatory boundaries.

CEO Jensen Huang remains optimistic about the long-term opportunity:

“We’re seeing accelerating demand for NVIDIA AI infrastructure across every industry and geography. The AI revolution is transforming computing from the ground up, creating sustained demand for our accelerated computing platform.”

Looking Ahead: Q3 Guidance Points Higher

NVIDIA’s forward guidance suggests the momentum continues:

Q3 FY2026 Guidance	Expected Value	vs Q2 FY2026 Actual
Revenue	$54.0B (±2%)	+15.5% QoQ
Gross Margin (GAAP)	73.3% (±50 bps)	+0.9 pts
Gross Margin (Non-GAAP)	73.5% (±50 bps)	+0.8 pts
Operating Expenses (GAAP)	~$5.9B	+9.0%
Operating Expenses (Non-GAAP)	~$4.2B	+10.7%
Other Income (Non-GAAP)	~$500M	-3.8%
Tax Rate (GAAP & Non-GAAP)	16.5% (±1%)	+0.5 pts
Key Notes	• No H20 shipments to China assumed • Exit year with mid-70% gross margins • FY2026 opex growth in high-30% range
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This guidance implies another sequential acceleration and positions NVIDIA for potential $200+ billion in annual revenue run rate.

What This Means for Investors

Valuation in Context

At current levels, NVIDIA trades at elevated multiples that reflect its AI leadership position:

Forward P/E: ~35x (based on FY2026 estimates)
PEG Ratio: 0.8x (accounting for growth rate)
Price-to-Sales: 22x (TTM basis)

For real-time NVIDIA valuation metrics and comparative analysis, YCharts users can access comprehensive screening tools to evaluate these metrics against peers.

The Competitive Moat Remains Wide

NVIDIA’s advantages extend beyond raw performance:

CUDA ecosystem lock-in: High switching costs for customers
Developer network effects: Millions of developers trained on NVIDIA tools
Continuous innovation: Blackwell architecture already shipping to early customers

Risk Factors Haven’t Disappeared

Investors should monitor several key risks:

Regulatory uncertainty around export controls
Emerging competition from AMD, Intel, and custom silicon efforts
Historical cyclicality in the semiconductor sector
Valuation vulnerability to any demand slowdown

Sector-Wide Implications

NVIDIA’s results have ripple effects across technology:

AI Infrastructure Beneficiaries:

Cloud providers increasing capex for AI buildout
Memory companies seeing high-bandwidth memory demand surge
Networking providers benefiting from data center interconnect needs

Validation of the AI Thesis: These results confirm that AI infrastructure investment remains in early innings, with enterprises just beginning their adoption journey.

The Bottom Line

NVIDIA’s Q2 FY2026 earnings validate its position as the picks-and-shovels provider for the AI gold rush. While valuations reflect significant future growth expectations, the company continues delivering results that justify premium multiples.

For investors seeking AI exposure, NVIDIA remains the bellwether, though position sizing should reflect both the opportunity and inherent risks. As the AI transformation accelerates, NVIDIA appears uniquely positioned to capture value from what management describes as a multi-trillion dollar market opportunity.

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