Nvidia's Q2 FY2026 Results: Record-Breaking $46.7B Revenue Driven by AI Boom and Gaming Success

Reviewed byNidhi Govil

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Nvidia reports a record-breaking Q2 FY2026 with $46.7B revenue, showcasing the company's dominance in AI hardware and continued success in gaming, despite challenges in the Chinese market.

Nvidia's Record-Breaking Q2 Performance

Nvidia has posted exceptional financial results for the second quarter of its fiscal year 2026, with revenue reaching a record-breaking $46.743 billion, marking a 56% year-over-year (YoY) increase and a 6% quarter-over-quarter (QoQ) growth

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. This performance underscores Nvidia's dominant position in the AI hardware segment, with AI GPUs accounting for nearly 88% of its total revenue.

AI-Driven Data Center Success

Source: TweakTown

Source: TweakTown

The company's data center business emerged as the primary revenue driver, generating $41.1 billion, up 56% YoY and 5% QoQ

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. Large cloud service providers (CSPs) contributed approximately 50% of the total data center revenue. Compute revenue stood at $33.8 billion, while networking revenue surged to $7.3 billion, driven by strong adoption of Nvidia's GB200 NVL72 and GB300 NVL72 systems

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A significant highlight was the ramp-up of Blackwell GPUs, including Blackwell Ultra, which grew 17% QoQ and contributed revenue across all customer segments

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. Jensen Huang, Nvidia's co-founder and CEO, emphasized the exceptional demand for Blackwell, stating, "Blackwell is the AI platform the world has been waiting for, delivering an exceptional generational leap"

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Source: Silicon Republic

Source: Silicon Republic

Gaming Division's Strong Performance

Despite the AI focus, Nvidia's gaming division achieved remarkable results. The segment generated $4.3 billion in revenue, reflecting a 49% YoY increase and a 14% QoQ rise

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. This growth was attributed to robust demand for Blackwell-based gaming GPUs and the successful launch of the GeForce RTX 5060 and RTX 5060 Ti graphics cards

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Challenges and Opportunities in the Chinese Market

Nvidia faced challenges in the Chinese market due to export restrictions on its H20 AI accelerators. The company reported a $180 million charge related to banned sales to Chinese entities

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. Despite these obstacles, Nvidia is reportedly developing a new chip for China based on the Blackwell architecture, which could potentially lead to significant revenue growth in the future

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Financial Highlights and Future Outlook

Nvidia's net income surged to $26.4 billion, a 59% increase from the same period last year

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. The company's gross margin stood at 72.4%, down from 75.1% a year ago but up sharply from 60.5% in the prior quarter

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. Looking ahead, Nvidia projects revenue of approximately $54 billion ± 2% for the third quarter of its ongoing fiscal year

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Market Position and Competition

While Nvidia's growth has been remarkable, some analysts express concerns about the sustainability of its current profit margins. Nigel Green, CEO of deVere Group, noted, "Nvidia has been the undisputed champion of the AI boom, but margins are already eroding as rivals push into the space"

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. The company's high reliance on a few key customers, such as Microsoft and Meta, also raises concerns about market exposure

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Conclusion

Nvidia's Q2 FY2026 results demonstrate the company's strong position in both the AI and gaming markets. While challenges exist, particularly in the Chinese market and increasing competition, Nvidia's innovative product lineup and strategic focus on AI position it well for continued growth in the rapidly evolving tech landscape.

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