Nvidia enters its Q3 results with strong momentum after reporting sharp revenue and profit growth in Q2 FY2026, driven mainly by its Data Center business and rising demand for Blackwell AI chips. Analysts expect revenue near $54 billion, but the company faces risks from tighter US export rules, growing competition, and supply shortages.
Nvidia reports strong profit
Nvidia enters its Q3 results week with strong momentum from the previous quarter. In Q2 FY2026, the company reported revenue of $46.74 billion, a rise of 56% from last year. Revenue also grew 6% from the previous quarter. Net income increased to about $26.4 billion, up 59% year-on-year. Most of this growth came from the Data Center segment. It generated about $41.1 billion in revenue as cloud companies and businesses continued to expand their AI systems. Nvidia said its Blackwell architecture saw double-digit growth from Q1, showing strong global demand for high-performance AI chips. The company also reported a gross margin near 72.4%.
Analysts expect high revenue
For Q3 FY2026, Nvidia has guided revenue toward about $54 billion. Analysts expect results to fall between $54 billion and $57 billion. They also expect earnings per share of around $1.24. Many believe Data Center revenue will grow more than 50% from last year, driven by continued demand for large AI models and cloud services. The stock often moves sharply on earnings day. Options data suggests a price swing of 7–8% after the results. In past quarters, Nvidia’s shares moved between 7–10% within days of the report. Trading volumes also tend to rise as investors adjust their positions. US markets were mixed ahead of the earnings release. Nasdaq futures gained about 0.7%, S&P 500 futures rose 0.4%, and Dow Jones futures were flat. Investors remain cautious because Nvidia has become a key driver of the broader tech rally.
Faces risk due to export limits and competition
Despite strong demand, Nvidia faces several risks. The US government has expanded export rules for advanced chips, which forced Nvidia to remove some China-related revenue from its Q3 outlook. China has long been a major market for Nvidia’s AI hardware, and tighter restrictions may affect future sales. Competition is also growing. Large cloud providers are developing their own AI chips, which could reduce their reliance on Nvidia. In addition, shortages of memory chips and server parts may limit how many systems Nvidia can ship in the coming months. Analysts say investors will focus on supply levels for Blackwell chips, the pace of Data Center growth, and guidance for early 2026. Nvidia expects a non-GAAP gross margin of about 73.5%, and any change there may also affect the stock.
