Nvidia beats earnings, but no China H20 sales + “Blackwell” hype could accelerate the AI bubble

Welcome back, boys! The most anticipated earnings call of this month across the world has come.

Nvidia has just posted its Q2 numbers, and as everyone expected it came in ahead of expectations. EPS landed at $1.05, with revenue climbing more than 50% year-over-year. On the surface, it’s another beat, but there’s an important piece in the report: Nvidia reported no H20 chip sales in China this quarter, a hole that could represent $4 to 8 billion in lost revenue compared to prior periods. To get around restrictions, Nvidia recently struck a deal with the U.S. government that allows it to resume some China sales but at a steep cost, handing over 15% of its China chip revenue directly to the government.Looking forward to hearing everyone's thoughts!

CEO Jensen Huang leaned heavily into the company’s new Blackwell Ultra platform, calling it a “generational leap” with demand “ramping at full speed.” He highlighted NVLink rack-scale computing as “revolutionary,” stressing that it arrives just as reasoning AI models drive orders-of-magnitude increases in training and inference performance. In his own words: “The AI race is on, and Blackwell is the platform at its center.”

At the same time, Nvidia has been working to shore up its supply chain. A new magnets deal aims to secure rare-earth magnet capacity critical for GPU and data center expansion, insulating the company from geopolitical risks tied to China. Meanwhile, Nvidia continued returning capital to shareholders. In the first half of FY26 alone, it returned $24.3 billion through buybacks and dividends. The board just approved another $60 billion for share repurchases, essentially an open-ended program without expiration.

So where does this leave us? Nvidia is still printing massive results, but the cracks are starting to show, no China H20 revenue this quarter, revenue-sharing with the U.S. government cutting into margins, and growing tariff risks. At the same time, the stock is riding a $4 trillion valuation with expectations of $53 billion in revenue next quarter already priced in. The fundamentals are strong, but the narrative around “Blackwell” and the AI boom may be driving sentiment even more than the actual numbers. This isn’t the end of the AI story; it’s a coil tightening. If Q4 earnings do not show significant improvement and independence, the pressure that has been building will likely lead to a massive sell-off in FY27.

TLDR: Nvidia beat Q2 FY26 with $1.05 EPS and 50% YoY revenue growth, but reported zero China H20 sales (a $4–8B hole). To offset, it cut a deal giving the U.S. government 15% of China chip revenue and secured a new magnets deal to stabilize supply chains. Jensen hyped Blackwell Ultra as the “AI platform of the future,” and the board authorized a fresh $60B buyback. Fundamentals are strong, but with a $4T valuation and $53B already priced into Q3, this feels less like smooth sailing and more like a coil tightening one slip in Q4 or FY27, and the downside could get very real.