The world’s most valuable company, Nvidia, released its Q2 FY2026 results last week, showcasing another blockbuster quarter. Revenue came in at $46.7 billion, up 56% year-over-year, while operating income rose 53% to $28.4 billion.
Nvidia primarily designs Graphics Processing Units (GPUs), which are critical for data centers powering generative AI workloads – both training and inference. The company’s Data Center segment alone generated $41.1 billion in revenue, also up 56% year-over-year, underscoring its dominance in the AI infrastructure space.
Since the release of ChatGPT, Nvidia’s growth has been astronomical. Revenue has increased nearly sevenfold since July 2022. Big tech players like Microsoft, Amazon, and Alphabet have ramped up spending on Nvidia chips as they race to expand their AI capabilities. Nvidia estimates that enterprises will invest $600 billion in data center infrastructure this year – nearly double the amount spent two years ago. At the start of the year, big tech alone planned $350 billion in capital expenditure, with a significant portion earmarked for data centers.
Currently, Nvidia trades at a price-to-earnings (P/E) ratio of 49, reflecting high investor expectations. Its valuation hinges on continued and expanding investment in AI infrastructure – from tech giants to startups, and even national governments pursuing “Sovereign AI” strategies.
Looking ahead, Nvidia expects to generate $54 billion in revenue next quarter.
The company also reported a gross profit margin of 72% for the most recent quarter -an exceptional figure in the semiconductor industry. However, this dominance has sparked efforts from competitors, customers, and governments to reduce reliance on Nvidia’s products. Big tech firms are developing their own chips to manage escalating costs, while rivals aim to capture a share of the growing AI market. Countries like China are encouraging domestic AI companies to prioritize Chinese-designed chips, seeking to avoid dependence on a critical U.S.-based supplier.
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