Nvidia has achieved record-breaking results on the back of rising global demand for artificial intelligence, though political disputes continue to weigh on its future.
On Wednesday, the California-based chipmaker announced $46.7bn (£34.6bn) in second-quarter revenue, up 56% compared with the same period last year.
Despite the surge, shares slipped in after-hours trading after the company admitted it was still “working through geopolitical issues”. Nvidia remains at the centre of the trade conflict between Washington and Beijing.
Shifting policies under the Trump administration, designed to safeguard America’s lead in artificial intelligence, add more uncertainty to its prospects.
Tech giants drive AI momentum
Nvidia’s advanced chips have become indispensable for building artificial intelligence systems.
The company highlighted continued demand from major technology players such as Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both companies are expanding their AI operations at speed.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four large technology firms had doubled annual spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We are building the infrastructure to power that acceleration.”
Experts point to Nvidia’s unrivalled dominance. Colleen McHugh, chief investment officer at Wealthify, described the firm as “the engine of the AI boom”.
She said Nvidia depends heavily on continued investment by technology giants. If spending continues, she explained, the company’s revenue and shares will keep climbing.
Revenue from data centres jumped 56% to $41.1bn, though slightly below analyst expectations. Investor Eileen Burbridge, founding partner of Passion Capital, said this weaker result caused the “share price wobble”.
Even so, she described Nvidia’s performance as “unbelievable” but warned of risks if too much enthusiasm inflates a bubble.
In July, Nvidia became the first company worldwide to reach a $4trn valuation. The firm now forecasts revenue of $54bn for the current quarter, above Wall Street estimates.
Political tensions shape the outlook
Despite historic results, Nvidia continues to face obstacles from geopolitics.
In July, the company announced it would restart sales of its high-end AI chips to China. The move followed lobbying from Huang, who persuaded the Trump administration to reverse its ban on the H20 chip, developed specifically for Chinese customers.
The restriction had been introduced amid concerns that the chips could support China’s military and its domestic AI industry.
Executives confirmed that by late July, US officials began reviewing licenses for H20 sales. Some Chinese clients received approval, but Nvidia has not yet shipped the chips.
The US government expects to receive 15% of revenue from licensed H20 sales. Nvidia excluded the H20 from its forecast and is pressing for permission to sell its new Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is accelerating efforts to grow its own semiconductor industry. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s ability to remain “the bellwether of the AI economy” may depend on whether its expansion into robotics secures its long-term dominance.
