What impacted Nvidia's gross profit in Q2 2025?

Nvidia's gross margin decreased by 3.3 percentage points from the previous quarter to 75.1% in Q2 2025, which can be attributed to several factors:

1. Revenue Mix and Business Segment Performance: While Nvidia's overall revenue surged, the impact on gross margin was nuanced by the revenue distribution across different business segments. The Professional Visualization segment, which contributed $1.09 billion to the revenue pool, might not yield the same gross margin as the Data Center segment, which generated $26.3 billion. The varying profit margins across segments can influence the overall gross margin percentage.

2. Cost Structure and Operating Expenses: Nvidia's expansion into new product categories, such as Spectrum-X Ethernet and NVIDIA AI Enterprise software, might have increased operational costs. Additionally, the development and testing of next-generation products like Blackwell could have incurred significant expenses, which might not be fully reflected in the current quarter's revenue.
3. Supply Chain and Inventory Management: The company's inventory levels, which are over twice those of the previous year, might indicate challenges in managing supply chain efficiencies. Inflationary pressures and logistics disruptions could have added to these costs, impacting gross margin.
4. Price Competition and Market Dynamics: The accelerated computing and AI solutions market is highly competitive. Price pressures from competitors or strategic pricing decisions to capture market share could have affected Nvidia's gross margin.

In conclusion, Nvidia's gross margin in Q2 2025 was impacted by a combination of factors including revenue mix, cost structure, supply chain management, and market dynamics. These elements collectively influence the company's ability to maintain and optimize its gross margin despite robust revenue growth.