Nvidia (NVDA) delivered another blockbuster earnings release last week, and the obvious question now is whether its monster rally, with shares up 58% over the past year, has more room to run. Investors are worried that NVDA may be experiencing some bullish fatigue, with even a slight disappointment potentially leading to a rush for the exits. For the quarter, revenue jumped to $46.7 billion, up 56% year over year and 6% sequentially, with data center once again carrying the load.
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Now, the stock has wobbled since some investors seem to have nitpicked a slight data center miss versus whisper numbers, but the underlying engine still looks ferocious. NVDA’s forward guidance is pointing higher, networking is breaking records, and margins remain sky-high. I think the setup for the back half looks sturdier than the post-print headlines implied. Therefore, I am Bullish on the stock.
What NVDA’s Q2 Actually Reveals
Kicking off with the numbers, total revenue hit a record $46.7 billion, driven by $41.1 billion in data center sales—now accounting for roughly 88% of the company’s top line. Management highlighted a 17% sequential increase in Blackwell data center revenue in Q2, underscoring that the generational upgrade cycle is shifting from hype to real dollars. Gaming rebounded to $4.3 billion, while networking also exceeded expectations, delivering a broad-based beat across the company’s most critical segments.
The perceived issue, and the share-price wobble, was that the data center landed just a hair shy of the latest consensus marks. Yet, the more significant indicator is the mix, with networking revenue climbing 98% year over year to $7.3 billion, as hyperscalers scaled both InfiniBand and high-speed Ethernet to stand up increasingly larger AI clusters. The company also reiterated there were no H20 shipments to China in Q2, which cleans up the narrative around export controls and keeps investors focused on ex-China demand.
Momentum or Mirage: Will the Growth Story Hold?
Management’s outlook says yes — for now. Nvidia guided Q3 revenue to approximately $54 billion, plus or minus 2%, a sequential step-up that implies another hefty quarter of AI infrastructure build-out. That guide explicitly assumes zero H20 revenue to China, so it’s fair to assume that any policy shift would be upside, not baseline. Meanwhile, the company highlighted that Blackwell’s contribution is ramping, which should support both compute and networking through year-end as cloud and enterprise deployments broaden.
Of course, there are genuine swing factors to keep in mind. Hyperscaler capex can fluctuate, rivals are not standing still, and several megacaps are advancing their in-house accelerators. Even so, Nvidia’s incumbency across GPUs, interconnects, software, and systems remains the heaviest flywheel in the industry. The near-term proof points are straightforward, as evidenced by sustained orders for Blackwell systems, continued networking strength, and healthy take-rates for enterprise stacks that make AI useful beyond training. For Q3, the $54 billion bogey is the cleanest scoreboard we’ll get.
NVDA’s Margins Spark High-Stakes Valuation Debate
NVIDIA’s margin story remains exceptional. For Q3, the company guided GAAP and adjusted gross margins to about 73.3% and 73.5%, respectively—levels few chipmakers ever approach. While operating expenses are set to rise in line with the product roadmap, margins at this scale continue to drive outsized earnings and cash generation. Put simply, as long as revenue continues to climb, profits are likely to exceed expectations.
The challenge for investors is price versus pace. Nvidia shares have outperformed the sector all year, raising the bar to a point where even strong results can spark muted reactions. The stock trades at roughly 39x this year’s expected EPS, compared to a median forward P/E of 23x across the sector. That premium underscores Nvidia’s unique position but also highlights the risk of a sharp correction should growth slow, reminding investors of the cyclical profile the business carried until just a few years ago.
Still, momentum looks intact. Accelerating Blackwell shipments, record networking sales, and guidance that tops consensus suggest the current multiple can be sustained. If management executes on its $54 billion outlook and affirms continued strength in networking demand, the growth-at-scale narrative remains intact—without requiring a rebound in China. Any resumption of Chinese sales in the coming quarters would simply add another leg of upside.
What is the Prediction for NVDA Stock?
Wall Street remains very bullish on NVDA with the stock carrying a Strong Buy consensus rating based on 34 Buy, three Hold, and just one Sell ratings over the past three months. In the meantime, NVDA’s average stock price target of $211.86 suggests ~24% upside from current levels.
Nvidia’s Earnings Engine Powers the AI Boom
Nvidia’s Q2 results reaffirmed that the AI infrastructure cycle remains in full swing. Total revenue almost reached $50 billion, with data center contributing $41.1 billion and networking surging 98% year over year—a combination that points to durable growth despite export restrictions and intensifying competition. The smart money is willing to bet that NVDA will breach $50 billion by this time next year.
The focus now shifts to Q3, where guidance of roughly $54 billion in revenue and gross margins near 73% will serve as the next test. If those targets hold and Blackwell adoption continues to build, the rally has room to run, backed by an earnings engine that justifies the momentum.