Nvidia Corp. on Wednesday reported better-than-expected earnings for its fiscal second quarter of 2026, driven largely by strong demand in its data centre and gaming segments. The chipmaker also issued guidance above Wall Street forecasts for the current quarter.
The Santa Clara, California-based company posted revenue of $46.74 billion for the quarter ended July 27, up 56% from a year earlier and above analyst estimates of $46.23 billion. Adjusted earnings per share were $1.05, a 54% increase from the same period last year, beating consensus projections of $1.01.
Data Centre and Segment Performance
Data centre revenue, which includes sales of chips used in artificial intelligence systems, rose 56% year-over-year to $41.1 billion, slightly below expectations of $41.25 billion. Compute revenue was $34.1 billion, in line with estimates, while networking revenue came in at $5.07 billion, also matching forecasts.
Other business segments posted solid gains. Gaming revenue rose 49% from last year to $4.3 billion, while professional visualisation climbed 32% to $601 million. Automotive revenue reached $586 million, up 69% year-over-year but short of the $592.7 million estimate.
Nvidia’s adjusted gross margin for the quarter was 72.7%, topping forecasts of 72.1%. Adjusted operating income rose 51% to $30.17 billion, while adjusted operating expenses increased 36% to $3.8 billion. Net income on an adjusted basis grew 52% to $25.78 billion.
Q3 Outlook and Shareholder Returns
For the third quarter, Nvidia expects revenue of about $54 billion, plus or minus 2%, which would represent roughly 15% growth from the prior quarter. Analysts had projected $52.5 billion. The company guided for adjusted gross margins of around 73.5% and operating expenses of about $4.2 billion.
Profitability measures were mixed. Adjusted earnings before interest and taxes stood at $28.44 billion, slightly below projections of $28.97 billion. Free cash flow was reported in the mid-$20 billion range, compared with $26.1 billion in the previous quarter.
Nvidia returned $24.3 billion to shareholders in the first half of fiscal 2026 through buybacks and dividends. The board also expanded the company’s share repurchase authorisation by $60 billion.
CEO Statement
Chief Executive Jensen Huang said demand for the company’s latest “Blackwell” platform has been strong as adoption of generative and reasoning AI accelerates worldwide. Revenue from the Blackwell product line grew 17% from the prior quarter.
Nvidia’s results underscore the company’s dominant role in supplying chips for artificial intelligence workloads, though some segments came in just below expectations. Investors will now look to the third quarter to see if the company can sustain its momentum in the face of rising competition and growing AI infrastructure needs.
