Nvidia faces Wall Street’s high expectations two years into AI boom
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 since the explosion of generative artificial intelligence started to transform Nvidia’s business. Since then, the chipmaker’s revenue has more than tripled and profits have quadrupled.
Nvidia‘s fiscal second-quarter earnings report, scheduled for Wednesday, will mark the second anniversary of growth, as the company shifted from being known as a maker of gaming chips to its current position at the heart of the technology industry.
Last month, Nvidia became the first company to hit a $4 trillion market cap, and it’s continued to appreciate in value. Since the end of 2022, around the time OpenAI launched ChatGPT and sparked the generative AI boom, Nvidia’s stock price is up twelvefold. It’s up 33% this year, closing on Friday at $177.99.
Growth is still substantial for a company Nvidia’s size, but it has slowed dramatically. After five straight quarters of triple-digit expansion in 2023 and 2024, revenue growth dipped to 69% in the fiscal first quarter this year. Nvidia is expected to report a year-over-year jump of 53% to $45.9 billion in its second-quarter report, according to LSEG’s consensus of analyst estimates.
Data center revenue in the first quarter accounted for 88% of Nvidia’s total sales, the clearest sign of how significant AI has become to its business. The company said that 34% of total sales last year came from three unnamed customers. Analysts say Nvidia’s top end users are major internet companies and cloud providers such as 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,” said Melissa Otto, head of Visible Alpha Research at S&P Global, which aggregates Wall Street research.
Nvidia makes up about 7.5% of the S&P 500.
Tech’s megacap companies, other than Nvidia, reported quarterly results in late July, updating Wall Street on their investment plans. In all, they’re looking to spend roughly $320 billion on AI technology and data center buildouts this year.
OpenAI, which is still private but has a valuation in the hundreds of billions of dollars, says it will team up with SoftBank and Oracle to spend $500 billion over the next four years on the Stargate project, which President Donald Trump announced in January.
Jensen Huang, co-founder and CEO of Nvidia, displays the new Blackwell GPU chip during the Nvidia GPU Technology Conference in San Jose, California, on March 18, 2024.
David Paul Morris/Bloomberg via Getty Images
Analysts say about half of AI capital spending ends up with Nvidia. The company’s reliance on the so-called hyperscalers leaves it vulnerable to changes in the macroeconomic environment and in the artificial intelligence industry, which remains hard to predict.
OpenAI CEO Sam Altman said last week that he believes “investors as a whole are overexcited about AI,” and even said it could be a “bubble.”
But don’t expect a pullback yet. OpenAI CFO Sarah Friar told CNBC on Wednesday that the company “constantly” doesn’t have enough computing power.
As always, Wall Street will be paying close attention to Nvidia’s guidance and other forward-looking commentary from CEO Jensen Huang. For the fiscal third quarter, analysts are expecting revenue growth of 50% to $52.7 billion, according to LSEG. If Nvidia guides higher and tops estimates for the second quarter, analysts say that kind of “beat and raise” could drive AI optimism even higher.
Blackwell ramp
The most important offering from Nvidia is its Blackwell line, which includes individual graphics processing units and entire systems tying together 72 GPUs.
Strong Blackwell numbers would affirm Nvidia’s continuing technological lead and foothold among its key customers, said Ryuta Makino, an analyst at Gamco Investors, which has a stake in the company.
“It solidifies that hyperscaler spending is still very strong with the Blackwell ramp,” Makino said.
Nvidia said in May that its new product line reached $27 billion in sales, accounting for about 70% of data center revenue. That’s a steep increase from $11 billion in the prior quarter.
As more Blackwell chips get installed, experts anticipate that their superior computing power will enable companies like OpenAI and Anthropic to create even more capable AI models. OpenAI’s GPT-5, which was announced earlier this month, was trained on Nvidia’s last-generation Hopper chips, not the newer Blackwell processors.
Nvidia said last year that Blackwell would be limited by supply — how many chips its partners can build and ship — and not by demand.
Blackwell Ultra is expected to start shipping in the second half of 2025. Nvidia recently pushed back on an analyst report from Asia that said Rubin, the chip technology expected to comprise the bulk of GPU sales in 2027, was seeing early production problems.
One visible sign of Nvidia’s rise is Huang’s worldwide fame. He’s regularly name-checked by Trump and during the quarter traveled to meet with business leaders and officials in Taiwan, China, Germany, England and Saudi Arabia.
Huang recently struck a deal with Trump to regain access to the Chinese market. Nvidia will pay 15% of its China chip revenue to the U.S. government in exchange for licenses to export its China-focused AI chip called the H20, Trump said this month. The president added that he’d asked for 20%, but Huang bargained him down.
The H20 is worth a lot to Nvidia. The chip would have contributed about $8 billion in sales in the second quarter, Nvidia said in May, before the U.S. government said it would require a license to ship it to China, effectively shutting off sales.
Nvidia did not include any H20 sales in its guidance for the second quarter, and analysts doubt that it will include any in its forecast for the current period, partially because the Chinese government is pressuring its cloud providers to use homegrown chips from companies such as Huawei.
If H20 is included in guidance, it could boost revenue expectations by about $2 billion to $3 billion, according to analysts at KeyBanc, who recommend buying the stock. But they said they expect Nvidia to completely 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 working on a new China AI chip based on Blackwell that would also likely need the president’s approval.
“I’m sure he’s pitching the president all the time,” Commerce Secretary Howard Lutnick said about Huang last week on CNBC’s “Squawk on the Street.”
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Nvidia CEO Jensen Huang waves to a crowd as he leaves the China International Supply Chain Expo (CISCE) in Beijing on July 17, 2025.
Jade Gao | Afp | Getty Images
Nvidia CEO Jensen Huang said there’s a “real possibility” the company brings its advanced Blackwell processor to China as he urges the U.S. government to open up access for American chipmakers.
He also predicted the artificial intelligence market in the world’s second-biggest economy will grow 50% next year.
“The opportunity for us to bring Blackwell to the China market is a real possibility,” Huang said on Wednesday in a call for Nvidia’s latest quarterly results. “We just have to keep advocating the importance of American tech companies to be able to lead and win the AI race, and help make the American tech stack the global standard.”
Huang personally visited the White House in July and August to secure export licenses for Nvidia’s current-generation chip for Chinese AI, called the H20. In August, the White House announced that President Donald Trump and Huang had struck a deal in which Nvidia would receive export licenses in exchange for 15% of China sales of the H20 going to the U.S. government.
After the meeting, Trump said he was open to making a deal for Blackwell chips, which is Nvidia’s latest AI technology that currently comprises the majority of its data center revenue.
Huang has said that it is better for Chinese AI developers to use Nvidia’s chips rather than force them to use homegrown Chinese options by preventing exports, which could incentivize the Chinese tech industry to catch up.
If Nvidia were to release a Blackwell chip in China, it could spur a large amount of sales as Chinese AI developers opt for the most powerful chips available. Nvidia would have to modify its Blackwell chips for the U.S. market to make them slower in certain aspects in order to comply with U.S. export regulations.
“The Blackwell is super-duper advanced. I wouldn’t make a deal with that,” Trump said in August, before adding that it was possible to make a deal for a “somewhat enhanced in a negative way” version of Blackwell.
Huang’s bullish comments on Wednesday come after the company reported second-quarter year-over-year revenue growth of 56% to $54 billion, despite not selling a single H20 chip to China during the quarter. Nvidia said it released $180 million in H20 inventory to a customer outside of China, which accounted for $650 million in sales.
Nvidia said it is not counting on any H20 sales in the October quarter as part of its forecast for $54 billion in revenue, but that the company could sell between $2 billion and $5 billion in H20 chips, depending on the geopolitical environment.
“If we had more orders, we can build more,” Nvidia finance chief Colette Kress said on the call with analysts.
Nvidia said that while it had received some licenses after the meeting with Trump, the U.S. government has yet to publish official regulations outlining how its cut of sales will work.
“USG officials have expressed an expectation that the USG will receive 15% of the revenue generated from licensed H20 sales, but to date, the USG has not published a regulation codifying such requirement,” Kress said.
Huang told analysts that China is the second-largest AI market in the world.
“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,” Huang said. “And if it’s $50 billion this year, you would expect it to grow, say, 50% per year.”
Recent reports have indicated that the Chinese government is encouraging AI developers to use homegrown chips over those from Nvidia.
“We’re still waiting on several of the geopolitical issues going back and forth between the governments and the companies trying to determine their purchases and what they want to do,” Kress said.
WATCH: Nvidia sales drop more than 4% as chipmaker says no Q2 H20 sales to China-based customers
Boonchai Wedmakawand | Moment | Getty Images
The founder of the company behind the IRL social media app was charged with defrauding investors of $170 million in the company’s 2021 funding round, the Department of Justice said Wednesday.
A federal grand jury in Oakland federal court indicted Abraham Shafi, 38 of Hawaii, with wire fraud, securities fraud and obstruction in connection with the scheme, the DOJ said.
Shafi was the CEO of Get Together, the parent company of IRL. The company was valued at $1 billion after its 2021 Series C funding round. IRL, which shuttered in June 2023, was a platform for users to organize events and offline activities. It found some traction in 2018, ranking among Apple’s top social apps.
Shafi allegedly spent millions on incentive advertising to boost installs of the app leading up to the Series C while maintaining to investors that the company spent “very little” on getting new users, the DOJ said.
He then concealed the expense by invoicing it to another firm, the DOJ said.
The indictment also alleges that the CEO and his fiancée used investor funds for “luxury hotel stays, luxury clothing, purchases from home furnishing retailers, thousands of dollars for art classes, and hundreds of thousands of dollars for SHAFI’s wedding, including payments for wedding guests’ airfare and luxury hotels.”
Shafi told CNBC in February 2018 that investors backed the company on its potential to compete with Facebook and Snapchat. Investors in IRL included Peter Thiel’s Founders Fund and the venture firm Floodgate.
Shafi’s co-founders at IRL included Scott Banister, the first board member of PayPal and an early investor in Facebook, among others.
Only Shafi was named in the DOJ indictment. He faces a max of 20 years in prison on each count, the DOJ said.
Last year, the Securities and Exchange Commission filed a civil lawsuit against Shafi for the same alleged scheme.
“Shafi took advantage of investors’ appetite for investments in the pre-IPO technology space and fraudulently raised approximately $170 million by lying about IRL’s business practices,” Monique Winkler, director of the SEC’s San Francisco Regional Office, said in a release at the time.
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A news ticker outside Fox News headquarters reads: Grand jury votes to indict former President Donald Trump, at the News Corporation building in New York City, U.S., March 31, 2023.
Brendan Mcdermid | Reuters
In less than three days, college football will be showcasing one of its most-highly anticipated week one matchups ever, with top-ranked Texas heading on the road to play reigning national champion and third-ranked Ohio State.
Fox is airing the much-hyped game. YouTube TV subscribers may be out of luck.
Google‘s YouTube said on Monday it may remove channels like Fox Broadcast Network, Fox News and Fox Sports if the company is unable to reach a new agreement with Fox Corp. by 5 p.m. ET on Wednesday. The two sides are still in a standoff, putting YouTube TV customers at risk of missing out on major sporting events and hefty ad dollars in limbo.
For Google, the issue is how much Fox is charging for its content.
“Fox is asking for payments that are far higher than what partners with comparable content offerings receive,” YouTube wrote in its Monday blog post.
YouTube TV has roughly 9.4 million subscribers. Most notably for sports fans, Fox is the home for many upcoming football games, both college and pro. The NFL season begins next week, with Fox set to air games starting on Sunday, Sept. 7
YouTube pays broadcasters like Fox to carry their channels.
In addition to football, Fox shows Major League Baseball games, and the MLB regular season is entering its final stretch. Fox will be airing some playoff games that follow, as well as the World Series, which is scheduled to start in late October.
Brendan Carr, chair of the Federal Communications Commission, weighed in on Tuesday.
“Google removing Fox channels from YouTube TV would be a terrible outcome,” he said on X. “Millions of Americans are relying on YouTube to resolve this dispute so they can keep watching the news and sports they want — including this week’s Big Game: Texas @ Ohio State. Get a deal done Google!”
The Texas – Ohio State game has added intrigue as its Arch Manning’s first marquee start as quarterback for the top-ranked Longhorns.
The hefty roster of Fox programs may be enough for sports fans to turn off YouTube TV in favor of other options. One place subscribers could turn to is Fox One, Fox’s standalone streaming service, which just launched last week, ahead of the NFL season. Fox One costs $19.99 per month or $199.99 annually.
The base plan for YouTube TV costs $82.99 per month and includes over 100 live channels and unlimited cloud DVR. If Fox does go offline for an extended period of time, YouTube will give members a $10 credit, the Google company said.
YouTube recently overtook Netflix, which has a market cap of $518 billion, as the top streaming platform in terms of audience engagement.
While YouTube and Fox have set a deadline of Wednesday to reach a deal, it’s common for carriage disputes to result in a deadline extension that would give the parties more time to negotiate.
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