EPS of $1.08 increased by 38.5% from previous year
Gross margin of 72.4%
Net income of 26.42B
"Not provided in the input data." - N/A
NVIDIA Corporation (NVDA.NE) QQ2 2026 Results: AI-Compute Leader Delivers Record Revenue, Margin Expansion, and Robust Free Cash Flow
Executive Summary
NVIDIA reported a standout QQ2 2026 quarter, underscoring the persistence of AI-driven demand for its data center GPUs. Revenue reached USD 46.743 billion, up approximately 33% year over year and 6% quarter over quarter, with gross margins of ~72.4% and net income of USD 26.42 billion. Earnings per share stood at USD 1.08, up roughly 38% year over year and 40% quarter over quarter. Free cash flow totaled USD 13.47 billion, and NVIDIA ended the period with a substantial net cash position, supported by USD 56.8 billion of cash and short-term investments and USD 9.72 billion in net share repurchases during the period.
The results reflect a sustained AI compute cycle driven by hyperscalers and enterprise customers investing in training and inference workloads. The company benefits from a favorable product mix (high-margin data center GPUs and related software) and a capital-light operating model that converts a large portion of revenue into operating cash flow. Management commentary around continued data center growth, product ramp of next-generation accelerators, and software-enabled AI offerings suggests durable profitability and a strong runway for value creation, though the outturn remains exposed to the pace of AI adoption, competitor dynamics, and potential regulatory considerations around export controls and supply chains.
Overall, NVIDIAβs QQ2 2026 performance reinforces its leadership in AI infrastructure, supports a positive longβterm growth thesis, and provides a robust base for future capital allocation (buybacks, dividends, and selective strategic investments). Investors should monitor the cadence of hyperscale capex, product cycles, and the evolving competitive landscape as drivers of sustained profitability and multiple expansion.
Efficiency, cash flow, and capital allocation
- EBITDA: USD 28.44 billion; EBITDA margin 60.84%
- Operating cash flow: USD 15.365 billion
- Free cash flow: USD 13.47 billion
- Net cash position: Net debt of USD -1.041 billion (net cash)
- Cash and short-term investments: USD 56.791 billion (cash 11.639B; short-term investments 45.152B)
- Capex: USD 1.895 billion; free cash flow yield supported by substantial operating cash flow
Balance sheet and liquidity
- Total assets: USD 140.74 billion
- Total liabilities: USD 40.609 billion; total equity: USD 100.131 billion
- Debt levels: Short-term debt USD 0.301 billion; long-term debt USD 10.297 billion; total debt USD 10.598 billion
- Liquidity position is robust with ample liquidity to fund buybacks, R&D, and capex while maintaining a cushion against macro shocks.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
46.74B
33.24%
6.08%
Gross Profit
33.85B
29.43%
26.94%
Operating Income
28.44B
30.05%
31.44%
Net Income
26.42B
36.84%
40.73%
EPS
1.08
38.46%
40.26%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
- AI data center demand remains the primary growth engine, with continued strength in both training and inference workloads across hyperscalers and enterprise customers.
- Product mix benefits high-margin data center GPUs and software offerings, aiding sustained margin expansion and cash generation.
- NVIDIA continues to scale capacity and ramp next-generation accelerators to meet rising AI computeιζ±, while optimizing operating leverage and R&D efficiency.
- Capital allocation remains active, with substantial share repurchases and a disciplined dividend policy, signaling confidence in long-term free cash flow generation and balance sheet strength.
- Potential regulatory and geopolitical risks (export controls, China-related restrictions) are monitored, but management views the current environment as favorable for continued data center demand and AI workloads in the near to medium term.
Not provided in the input data.
β N/A
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β N/A
Forward Guidance
No explicit quarterly guidance was provided in the supplied data; however, the earnings posture and management commentary imply an expectation of continued growth in data center demand driven by AI adoption, cloud provider capex, and enterprise AI deployments. Our qualitative assessment indicates:
- Upside potential if hyperscalers maintain a robust AI training/inference cycle and NVIDIA successfully scales next-generation GPUs and accompanying software ecosystems.
- Risks include a potential deceleration in AI spend, competitive pressure from AMD and other accelerators, and regulatory/export-control constraints affecting China-related sales.
- Key factors to monitor: quarterly data center GPU demand signals, capacity expansion progress, product transition timing to newer accelerators, software revenue trajectory (NVIDIA AI Enterprise adoption), and evolving regulatory considerations that could influence geographic mix or collaboration with cloud providers.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NVDA.NE Focus
72.42%
N/A
N/A
N/A
MSFT.NE
68.70%
45.50%
7.96%
1.66%
AMD.NE
49.10%
4.61%
0.47%
35.47%
AAPL.NE
47.10%
31.00%
37.10%
3.47%
GOOG.NE
58.10%
32.40%
7.85%
23.43%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
NVIDIA remains a foundational lever for AI infrastructure, with a strong balance sheet, exceptional cash generation, and a favorable long-term growth trajectory driven by AI compute demand. The QQ2 2026 results demonstrate sustained top-line expansion, margin resilience, and meaningful FCF generation that supports continued buybacks and strategic investments. However, the stock remains sensitive to the AI cycle, competitive dynamics, and regulatory developments. Investors should consider a constructive long-term stance given the secular AI adoption tailwinds, while staying mindful of near-term macro volatility and policy risks that could influence data center capex and geographic mix. Key monitorables include the pace of hyperscale GPU deployments, the transition to next-generation accelerators, software revenue growth, and any regulatory actions affecting cross-border AI hardware sales.
Key Investment Factors
Growth Potential
Sustained AI compute demand supports long-duration revenue and earnings growth, underpinned by data center GPU leadership, expanding software offerings, and strong free cash flow generation.
Profitability Risk
Execution and competitive risk from AMD and other AI accelerator suppliers; potential cyclicality in AI spend; regulatory/export controls impacting cross-border sales; supply chain constraints and pricing pressure in sensitive components.
Financial Position
Very strong liquidity and balance sheet health with USD 56.8B in cash and short-term investments, a net cash position, and significant free cash flow to fund buybacks, dividends, and selective investments.
SWOT Analysis
Strengths
Market leadership in AI data center GPUs and CUDA software ecosystem
Exceptionally strong gross and operating margins (gross ~72.4%, operating ~60.8%)
Robust free cash flow generation and a strong balance sheet with a net cash position
Large, growing installed base and ecosystem, enabling durable demand for next-gen accelerators
Weaknesses
Significant reliance on AI compute demand cycles and hyperscale capex
High valuation embedded into current stock price could limit downside protection
Concentration risk around data center and enterprise AI workloads, with less exposure to diversified consumer end markets
Opportunities
Continued GPU leadership fueling AI model training and inference across cloud, enterprise, and edge
Expansion of software offerings (NVIDIA AI Enterprise) and ecosystem accelerators
New application areas (Omniverse, autonomous systems, automotive AI, networking) expanding total addressable market
Threats
Intensifying competition from AMD and other AI accelerator suppliers
Regulatory/export-control risk impacting cross-border AI hardware sales
Macro slowdown or IT spending fatigue affecting data center refresh cycles