Earlier in August 2025, NVIDIA shares hit new records. Then, NVIDIA released its 2Q2025 results. Once again, beating analysts’ forecasts.
After its stock’s record run, investors are watching to see if this chipmaker can keep growing.
Here are five key takeaways you should know about NVIDIA after its latest earnings.
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1. NVIDIA’s strong revenue growth
NVIDIA posted $46.7 billion in revenue for the quarter. This is the highest in its history.
Revenue grew 6% q/q and was up 56% from 2Q last year, reflecting global AI demand. This also marks the fourth straight quarter of beating estimates.
So far, each of NVIDIA’s four major markets saw growth. Some industries are still early in their AI push, while others are scaling fast.
NVIDIA sells to four groups of customers, with the Data Center market being NVIDIA’s biggest driver – accounting 88% of NVIDIA’s total revenue.
NVIDIA provides chips built for AI training and cloud computing. Demand remains strong, with its major customers adding more data center capacity.
- Data Center (88% of total revenue) – main driver
- Gaming – up 14% q/q
- Professional Visualization – chips for design/graphics
- Automotive – chips for self-driving cars
2. Data Center Revenue Reigns
In its latest 2Q2025 results, NVIDIA’s Data Center grew 5% from last quarter. Revenue this quarter reached ~$41 billion.
NVIDIA splits this into two groups: Compute and Networking.
First, Compute being the larger one, brought in ~$33 billion just this quarter. What’s more, NVIDIA says demand is still strong for its Blackwell architecture, including the new Blackwell Ultra chips.
Much of this demand comes from big cloud providers. These include Microsoft, Amazon, Google, and Meta. These tech giants are investing heavily in AI. For example:
- Microsoft will spend about $80 billion this fiscal year on AI-powered data centers.
- Meta plans to spend up to $65 billion in 2025 to grow its AI systems.
- Google is investing $75 billion this year on AI infrastructure and data centers.
Next, unlike the past two quarters, this time growth came from Networking, which grew 46%. NVIDIA linked this demand for its Networking products, especially from cloud service providers and internet firms.
On the other hand, its Compute segment slipped 1%. The reason? A $4 billion drop in H20 sales.
3. Gross Margins Increased but Still Below Historic Highs
NVIDIA posted its gross margin of ~73%, lower than last year’s ~75%. However, gross margins grew sharply from last quarter’s 61% margins.
This dip was due to a one-off charge tied to H20 excess stock and purchase obligations after the export bans.
NVIDIA’s high gross margins are a reflection of its strong pricing power. Back then, revenues came from its Hopper HGX systems. Today, it’s from Blackwell full-stack data center solutions.
4. H20 Chips restrictions still a headwind
For context, NVIDIA launched its H20 chip in 2024 to work around US export controls to China.
Under the Biden administration, NVIDIA could sell the chips to China until April 2025. Since then, sales to China have stopped due to an export ban.
The thing is, NVIDIA’s CEO Jensen Huang has been vocal about selling these H20 chips to China. He said selling these chips is a win-win to both economies.
Beyond limiting China, the export restrictions have slowed down the US leadership in the global AI race.
Recently, the Trump administration has approved NVIDIA’s export licenses to sell again, but with a 15% revenue fee.
I believe it makes sense for the tech giant to continue to pursue the Chinese market, even if margins take a hit. CEO Huang said China is still one of NVIDIA’s largest customer markets – in fact, a $50 billion opportunity.
As the situation evolves, NVIDIA is working to remove barriers to selling chips in China. Doing so would help the company grow revenues in the coming quarters.
5. What to expect in 2025
Going forward, NVIDIA expects revenue to increase – excluding any upside of its H20 exports to China. This means, if sales to the Chinese market resume, this would send NVIDIA’s revenues higher.
NVIDIA expects its 3Q2025 to have higher operating expenses – expects this to be $4.2 billion, up from this quarter’s $3.8 billion. Gross margins are expected to widen slightly towards mid-70% by end 2025.
Overall, management expectations continue to be positive. But its growth may slow to single digits, as compared to last year’s triple digits surge. A return of NVIDIA chips to China does seem possible.
CEO Huang’s stance on the Chinese market aligns with Trump’s agreement to lift the ban. This likely tops investor concerns, with further uncertainty with regulatory hurdles in China.
Having said that, AI demand outside China still remains strong, especially from cloud providers and even major enterprise customers like Disney and Hyundai.
My final thoughts
Shares of NVIDIA have recently fallen from its record highs. However, it seems like fundamentals are on an upward path.
With heavy global AI spending and possible renewed access to China, I expect this trillion-dollar chip giant still has room to grow through 2025.
