AI Daily: Nvidia reports earnings, sees $3T-$4T in AI infrastructure spend

Catch up on the top artificial intelligence news and commentary by Wall Street analysts on publicly traded companies in the space with this daily recap compiled by The Fly:

NVIDIA RESULTS: Nvidia (NVDA) reported Q2 adjusted EPS of $1.05 and Q2 revenue of $46.74B, both better than the expected $1.01 and $46.13B, respectively. Jensen Huang, founder and CEO of Nvidia, said, “Blackwell is the AI platform the world has been waiting for, delivering an exceptional generational leap – production of Blackwell Ultra is ramping at full speed, and demand is extraordinary. NVIDIA NVLink rack-scale computing is revolutionary, arriving just in time as reasoning AI models drive orders-of-magnitude increases in training and inference performance. The AI race is on, and Blackwell is the platform at its center.”

Nvidia reported Q2 Data Center revenue of $41.1B, up 5% from the previous quarter and up 56% from a year ago, and Q2 Gaming revenue of $4.3B, up 14% from the previous quarter and up 49% from a year ago. The company also said, “There were no H20 sales to China-based customers in the second quarter. NVIDIA benefited from a $180M release of previously reserved H20 inventory, from approximately $650M in unrestricted H20 sales to a customer outside of China. For the quarter, GAAP and non-GAAP gross margins were 72.4% and 72.7%, respectively. Excluding the $180M release, non-GAAP gross margin for the quarter would have been 72.3%. For the quarter, GAAP and non-GAAP earnings per diluted share were $1.08 and $1.05, respectively. Excluding the $180M release and related tax impact, non-GAAP diluted earnings per share for the quarter would have been $1.04.”

The company also said it sees Q3 revenue of $54.0B plus or minus 2%, with consensus at $52.76B. Nvidia has not assumed any H20 shipments to China in the outlook, it notes, and GAAP and non-GAAP gross margins are expected to be 73.3% and 73.5%, respectively, plus or minus 50 basis points. 

During its earnings call, the company said it sees $3T-$4T in AI infrastructure spend by the end of the decade. Rubin remains on schedule for volume production next year, and it will be third generation NVLink Rackscale AI supercomputer with a mature and full-scale supply chain. Nvidia also noted that government officials have expressed an expectation that the U.S. will receive 15% of the revenue generated from licensed H20 sales.

CLOUD, AI INFRASTRUCTURE INVESTMENT: In a blog post, Google (GOOGL) said, “Google is investing an additional $9B in Virginia through 2026 in cloud and AI infrastructure. As we expand our local presence, including a new data center in Chesterfield County, we’re working with local partners on solutions for growing energy capacity demand, including efficiency programs and innovative technologies. This investment goes beyond infrastructure. We’re also equipping Virginians with AI and job-ready skills, at no cost. As part of a broader $1B commitment, all Virginia-based college students now have access to the Google AI Pro plan and AI training for a year, and the University of Virginia, Brightpoint Community College, and Northern Virginia Community College are part of the first cohort of the Google AI for Education Accelerator. These educational resources build on the AI training that all Virginians can access through the ‘Virginia Has Jobs’ AI Career Launch Pad.”