After an upbeat start to FY26, Nvidia is likely to deliver strong Q2 results

Nvidia Corporation (NASDAQ: NVDA) continues to lead the AI hardware market, leveraging its pioneering GPU architecture and proprietary CUDA parallel computing platform. In the latest quarter, demand surged across the company’s business segments, underscoring the rapid acceleration of AI adoption. Despite navigating tariff-related restrictions with relative success, ongoing uncertainties in the government’s trade policy remain a concern for Nvidia, given its deep investment in China’s AI market.

Estimates

The semiconductor behemoth’s second-quarter 2026 earnings report is slated for release on Wednesday, August 27, at 4:20 pm ET. Market watchers forecast earnings of $1 per share, on an adjusted basis, and revenues of $45.88 billion for the July quarter. In Q2 2025, Nvidia earned $0.68 per share on revenues of $30.04 billion. As per the management’s most recent guidance, it is looking for revenues of around $45 billion and a gross margin to be approximately 71.8% for the second quarter. The company’s quarterly revenue and profit have consistently beaten estimates for over two years.

NVDA has been one of the top-performing stocks this year, recently hitting an all-time high and continuing to outperform the S&P 500 index. The value has nearly doubled since April this year. Analysts’ bullish outlook on Nvidia’s stock suggests further growth potential, though its valuation appears stretched after recent gains.

Results Beat

In the first three months of FY26, adjusted earnings increased to $0.81 per share from $0.61 per share a year earlier, beating estimates. On a reported basis, net income was $18.8 billion or $0.76 per share in Q1, vs. $14.9 billion or $0.60 per share in the year-ago quarter. Driving the bottom-line growth, first-quarter revenue jumped 69% annually to $44.06 billion, mainly reflecting strong growth in the Data Center segment. The top line exceeded Wall Street’s estimates.

From Nvidia’s Q1 2026 earnings call:

“We now have multiple significant growth engines. Inference, once the light of workload, is surging with revenue-generating AI services. AI is growing faster and will be larger than any platform shift before, including the Internet, mobile, and cloud. Blackwell is built to power the full AI lifecycle, from training frontier models to running complex inference and reasoning agents at scale. Training demand continues to rise with breakthroughs in post-training and reinforcement learning, and synthetic data generation. But inference is exploding. Reasoning AI agents require orders of magnitude more compute.”

Blackwell Power

The recent surge in data center compute revenue is driven mainly by Blackwell, a new GPU architecture designed to power the next generation of AI and high-performance computing workloads. While the company continues to dominate the AI chip market, it is facing stiff competition from AMD, particularly in the consumer gaming GPU segment. Recently, Nvidia struck a deal with the Trump administration, under which it will pay the government 15% of its revenue from sales to China, in return for the license to sell certain chips in that market.

The average price of Nvidia’s shares for the last 52 weeks is $134.42. The stock opened at $180.65 on Monday and traded higher for most of the session.