Nvidia's Earnings Pullback and Path to Reacceleration in CY26

Nvidia’s Q2 2025 earnings report, released on August 27, 2025, underscored both the company’s dominance in AI infrastructure and the challenges clouding its near-term trajectory. Despite reporting $46.7 billion in revenue—a 56% year-over-year increase and exceeding Wall Street’s $46.13 billion forecast—the stock fell 3% in after-hours trading. This pullback was driven by data center revenue falling short of the $41.34 billion StreetAccount estimate, even as the segment grew 56% year-over-year to $41.1 billion [1]. The miss, coupled with unresolved geopolitical risks in China, has created a strategic inflection point for investors.

Earnings Pullback: A Miss in Context

The data center slowdown, though modest, reflects broader structural shifts. Export controls on H20 chip sales to China—a market that cost Nvidia $19.5 billion in lost revenue since 2024—remain a drag. While the U.S. government has signaled potential licenses for H20 resumption, Chinese firms are increasingly prioritizing domestic alternatives, complicating Nvidia’s market reentry [2]. Meanwhile, the Blackwell Ultra (GB300) ramp, though robust (1,000 racks shipped weekly), has yet to fully offset these headwinds [3].

Analysts like Stifel’s Ruben Roy note that the pullback is a “buying opportunity,” given Nvidia’s long-term positioning in AI infrastructure. “The market is pricing in near-term China risks but underestimating the scale of the $3–4 trillion AI infrastructure opportunity by 2030,” he argues [4].

Strategic Catalysts for CY26 Reacceleration

Nvidia’s path to reacceleration hinges on three key catalysts:

1. Blackwell Ultra Ramp and Rubin Roadmap
   The Blackwell Ultra, with its 50% NVFP4 performance boost and 288 GB of HBM3E memory, is now in full production, driving demand for AI and data center workloads [5]. By Q4 2025, the company expects to achieve $54 billion in revenue, excluding China [6]. However, the Rubin platform—set for a 2026 launch—could be a game-changer. Featuring six TSMC-fabricated chips and 50 PFLOPS of FP4 performance, Rubin is designed to outpace competitors like AMD’s MI450. Delays in its redesign, however, could limit 2026 volume [7].

2. China Market Access Resolution
   Nvidia’s B30A chip, a single-die Blackwell derivative tailored for China, is expected to outperform the H20 while complying with U.S. export rules. Coupled with the resumption of H20 shipments, this could unlock $50 billion in annual revenue by 2025 [8]. The U.S. government’s 15% revenue share on licensed H20 sales, though unconfirmed, adds regulatory uncertainty [9].

3. AI Infrastructure Adoption Trends
   Global demand for high-end GPU servers and ASICs is surging, with GB300 component shipments projected to rise sharply by year-end. The broader AI infrastructure market, now influencing the S&P 500, is expected to grow at 50% annually in China alone [10].

Investment Timing: Catalysts vs. Risks

For investors, the key is aligning with catalyst-driven timing. The resumption of H20 sales and B30A launches could drive a “beat-and-raise” scenario in late 2025, while Rubin’s 2026 debut may validate Nvidia’s long-term dominance. However, risks persist:
- Geopolitical Delays: U.S.-China tensions could prolong H20 licensing.
- Competitive Pressure: AMD’s rackscale solutions and Huawei’s improving chips may erode market share.
- Rubin Delays: A late 2026 Rubin launch could disrupt growth momentum [11].

Conclusion: A Strategic Setup for CY26

Nvidia’s earnings pullback reflects short-term challenges but masks a compelling long-term setup. The company’s leadership in Blackwell, Rubin’s potential, and China’s AI ambitions create a multi-year growth trajectory. Investors with a 12–18 month horizon should monitor three milestones:
1. September 2025: B30A and RTX6000D shipments to China.
2. Q4 2025: H20 license approvals and Blackwell Ultra volume.
3. Q1 2026: Rubin’s production readiness and AI infrastructure spending updates.

As Jensen Huang emphasized, “The AI revolution is just beginning.” For Nvidia, the path to reacceleration is clear—though the road will require navigating geopolitical and technical headwinds with precision.

Source:
[1] NVIDIA Announces Financial Results for Second Quarter [https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2026]
[2] Nvidia sees chances of bringing Blackwell AI chips to China [https://www.rcrwireless.com/20250829/ai-infrastructure/nvidia-chips-china]
[3] NVIDIA Q2 FY 2026 Results: Networking Steals the Spotlight [https://futurumgroup.com/insights/nvidia-q2-fy-2026-earnings-networking-steals-the-spotlight]
[4] Should You Buy NVIDIA After Solid Q2 2026 Results [https://www.nasdaq.com/articles/should-you-buy-nvidia-after-solid-q2-2026-results-without-china-sales]
[5] Nvidia shares Blackwell Ultra's secrets — NVFP4 boost [https://www.tomshardware.com/pc-components/gpus/nvidia-shares-blackwell-ultras-secrets-nvfp4-boost-detailed-and-pcie-6-0-support]
[6] NVIDIA Reports Record Q2 Revenue [https://www.mitrade.com/insights/news/live-news/article-8-1074139-20250828]
[7] Nvidia's Rubin, its next-gen GPU, faces possible delay due to redesign [https://seekingalpha.com/news/4484750-nvidias-rubin-its-next-gen-gpu-faces-possible-delay-due-to-redesign-fubon]
[8] Inside the Playbooks: How the Giants Are Executing AI [https://www.wisdomtree.com/investments/blog/2025/08/27/inside-the-playbooks-how-the-giants-are-executing-ai]
[9] Nvidia prepares new AI chip for China amid Washington's hesitation [https://dig.watch/updates/nvidia-prepares-new-ai-chip-for-china-amid-washingtons-hesitation]
[10] TMTB Morning Wrap [https://www.tmtbreakout.com/p/tmtb-morning-wrap-8dc]
[11] Nvidia enterprise GPU and CPU roadmaps: Rubin, Rubin Ultra, Feynman, and silicon photonics [https://www.tomshardware.com/tech-industry/semiconductors/nvidia-enterprise-roadmap-rubin-rubin-ultra-feynman-and-silicon-photonics]