Electronics
NVIDIA Posts Record Q2 Fiscal 2026 Results, Drives European AI Expansion Amid China H20 Sales Freeze
Highlight:
- Revenue of $46.7 billion, up 6% from Q1 and up 56% from a year ago
- Data Center revenue of $41.1 billion, up 5% from Q1 and up 56% from a year ago
- Blackwell Data Center revenue grew 17% sequentially
NVIDIA has delivered another record-shattering quarter, announcing on October 1, 2025, that its second quarter fiscal 2026 revenue hit $46.7 billion—a 56% increase year-over-year—powered by surging demand for its Blackwell Data Center solutions and bold new partnerships across Europe. The company’s official release, available here, underscores how NVIDIA’s strategic pivot is reshaping the global AI landscape.
Financial Highlights: Record Revenue and Profitability
NVIDIA’s Q2 fiscal 2026 financials mark a watershed moment for the chipmaker. Net income soared to $26.4 billion, representing a 59% jump from the previous year, and gross margins recovered robustly, reflecting the company’s growing dominance in AI and data center markets. The Blackwell Data Center segment led this charge, posting unprecedented gains that further cement NVIDIA’s leadership in high-performance computing. Detailed analysis can be found in this industry review.
H20 Chip Sales: No China Shipments, Global Realignment
This quarter, NVIDIA reported no H20 chip sales to China-based customers, a direct result of ongoing US export restrictions and licensing requirements. Instead, the company capitalized on global demand by redirecting previously reserved H20 inventory, securing $650 million in unrestricted H20 sales to a customer outside China. This strategic adaptation helped buoy revenue and maintain momentum despite geopolitical headwinds. Industry observers, including analyst Ryan Smith, note that NVIDIA’s Q3 outlook remains conservative on China H20 sales, pending further regulatory clarity.
Read Also: Nvidia Commits Up to $100 Billion in Landmark Investment Deal with OpenAI, Redefining the AI Race
European AI Expansion: Collaborations and Infrastructure
In an assertive move to expand its global footprint, NVIDIA unveiled a suite of collaborations with European governments and enterprises. The company announced new partnerships with France, Germany, Italy, Spain, and the UK to construct advanced Blackwell AI infrastructure. These initiatives include the launch of the world’s first industrial AI cloud for European manufacturers, aimed at boosting regional productivity, innovation, and digital sovereignty.
NVIDIA also rolled out its DGX Cloud Lepton platform across Europe, connecting local developers to powerful AI resources and facilitating sovereign language model (LLM) development. Partnerships now extend to regional supercomputers and AI research institutions across Europe and the Middle East, signaling a robust commitment to supporting the continent’s technological independence.
Market and Public Reaction: Optimism and Strategic Shifts
European tech and business media have responded with enthusiasm to NVIDIA’s AI infrastructure investments, highlighting potential benefits for manufacturing, research, and regional competitiveness. Investors and analysts are watching closely, noting that while the absence of China H20 sales introduces uncertainty, the strength of European partnerships and ongoing product innovation is fueling positive sentiment in local markets.
For those eager to discuss the implications of NVIDIA’s latest moves and the future of AI, join our WireUnwired WhatsApp community for real-time updates and expert insights.
Q2 Fiscal 2026 Summary
GAAP
($ in millions, except earnings per share)
| Q2 FY26 | Q1 FY26 | Q2 FY25 | Q/Q | Y/Y | |
|---|---|---|---|---|---|
| Revenue | $46,743 | $44,062 | $30,040 | 6% | 56% |
| Gross margin | 72.4% | 60.5% | 75.1% | 11.9 pts | (2.7) pts |
| Operating expenses | $5,413 | $5,030 | $3,932 | 8% | 38% |
| Operating income | $28,440 | $21,638 | $18,642 | 31% | 53% |
| Net income | $26,422 | $18,775 | $16,599 | 41% | 59% |
| Diluted earnings per share | $1.08 | $0.76 | $0.67 | 42% | 61% |
Non-GAAP
($ in millions, except earnings per share)
| Q2 FY26 | Q1 FY26 | Q2 FY25 | Q/Q | Y/Y | |
|---|---|---|---|---|---|
| Revenue | $46,743 | $44,062 | $30,040 | 6% | 56% |
| Gross margin | 72.7% | 61.0% | 75.7% | 11.7 pts | (3.0) pts |
| Gross margin excluding H20 related charges/releases, net | 72.3% | 71.3% | — | 1.0 pt | — |
| Operating expenses | $3,795 | $3,583 | $2,792 | 6% | 36% |
| Operating income | $30,165 | $23,275 | $19,937 | 30% | 51% |
| Net income | $25,783 | $19,894 | $16,952 | 30% | 52% |
| Diluted earnings per share | $1.05 | $0.81 | $0.68 | 30% | 54% |
| Diluted EPS excluding H20 related charges/releases, net and related tax impact | $1.04 | $0.96 | — | 8% | — |
Looking Ahead
NVIDIA’s Q2 fiscal 2026 performance underscores its agility and ambition. By doubling down on European expansion and swiftly reallocating resources amid export challenges, the company is setting the pace for the next wave of global AI innovation. As regulatory landscapes and market dynamics continue to shift, NVIDIA’s next chapters in both financial and technological leadership will remain closely watched.
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