NVIDIA's Q2 Sales Hit $46B: Can Blackwell Ramp-Up Deliver $54B in Q3?

NVIDIA Corporation NVDA recently delivered yet another impressive quarterly result, with revenues soaring 56% year over year to $46.7 billion in the second quarter of fiscal 2026. The performance was driven largely by its data center business, which has become the company’s main growth engine.Even with export restrictions weighing on its H20 chip shipments to China, demand for artificial intelligence (AI) compute remained strong across cloud providers, enterprises, and sovereign AI projects. At the center of this momentum is the Blackwell platform. NVIDIA has begun high-volume shipments of the GB300, with output now exceeding 1,000 racks per week.Customers are turning to Blackwell for its energy efficiency and significant performance gains compared to Hopper, making it a preferred choice for running advanced reasoning AI and inference workloads. With major players like OpenAI, Meta, and global cloud providers adopting Blackwell at scale, NVIDIA has positioned itself at the heart of the next wave of AI buildouts.For the third quarter, NVIDIA expects revenues to reach $54 billion, representing 55% year-over-year growth and a 16% sequential rise. Importantly, this forecast does not assume sales of H20 chips to China, leaving room for potential upside if export approvals from the U.S. government materialize. Gross margins are projected to expand 12.5 percentage points sequentially to 73.5% despite increasing costs associated with increasing Blackwell production. This reflects both strong demand and operational leverage.If NVIDIA manages to keep the Blackwell supply pace with the soaring global demand, it should secure its growth trajectory into the next phase of the AI cycle. The Zacks Consensus Estimate for fiscal 2026 revenues is pegged at $202.95 billion, indicating a year-over-year increase of 55.5%.Competition Heats Up for NVIDIA in AI InfrastructureNVIDIA’s major competitors, Advanced Micro Devices AMD and Intel INTC, are also stepping up their capabilities in the data center AI chip market.Advanced Micro Devices’ MI300X GPUs are gaining attention for their high memory and power efficiency. Several hyperscalers are testing AMD’s solutions as alternatives to NVIDIA’s Blackwell, especially in cost-sensitive or specialized workloads. Advanced Micro Devices is also building a strong software stack to grab more customers.Intel is focusing on both CPUs and AI accelerators to grab a market share in the data center space. The company is promoting its Gaudi 3 AI chips as a low-cost option for training and inference. Intel is also working with major cloud providers to expand the adoption of its AI hardware.NVIDIA’s Price Performance, Valuation and EstimatesShares of NVIDIA have risen around 29.3% year to date compared with the Zacks Computer and Technology sector’s gain of 12.9%.NVIDIA YTD Price PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 33.37, higher than the sector’s average of 27.63.NVIDIA Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for NVIDIA’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 44.5% and 35.3%, respectively. Estimates for fiscal 2026 and 2027 earnings have been revised upward in the past seven days.Image Source: Zacks Investment ResearchNVIDIA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC): Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks