Ward Capital Forum Learning and Building Wealth NVIDIA Earnings Breakdown and Strategy Guide

A comprehensive analysis framework examining NVIDIA's Q2 FY26 financial performance, covering revenue growth, profitability metrics, business segment performance, and market positioning in the AI infrastructure space.

1. Ward Capital Forum
Learning and Building Wealth
NVIDIA Earnings Breakdown and Strategy Guide

2. We’ll be breaking down NVIDIA’s latest earnings report, pulling out the key numbers, market
impact, opportunities, and risks to help you get a clearer view of where the market is headed
and identify the next profit-making moves.
Welcome to tonight’s session on learning and building wealth.
Learning and Building Wealth: NVIDIA Earnings Breakdown

3. Ø1. Revenue and Growth: Total revenue, YoY and QoQ
changes, and business segment performance.
Ø3. Growth Drivers: Real demand vs. financial adjustments;
policy and industry trends.
Framework for Analysis:
Ø2. Profitability: Gross margin, net income, and EPS,
adjusting for one-off factors.
Ø4. Cash Flow & Structure: Free cash flow, debt levels, and
capacity for investment.
Ø5. Management Outlook: Guidance compared to
expectations, tone on risks and opportunities.
Ø6. Market Environment: Competition, macro policies,
valuation, and risks.

4. I’ve already pulled together the key numbers for everyone, you can check them out in the chart below
First, look at revenue and growth — total revenue size, year-over-year and quarter-over-quarter changes,
and how each business segment performed
NVIDIA Q2 FY26 Revenue and Growth Ward Capital Forum
Segment Revenue Q/Q Growth Y/Y Growth Highlights
Total Revenue $46.7B +6% +56% Record high, strong momentum
Data Center $41.1B +5% +56% Driven by Blackwell GPUs and NVLink, core growth engine
Gaming & AI PC $4.3B +14% +49% RTX 5060 launch and DLSS 4 adoption boosted demand
Professional Visualization $601M +18% +32% Demand for new RTX PRO GPUs
Automotive & Robotics $586M +3% +69% Growth from DRIVE platform and Jetson Thor chips

5. Revenue hit a record high. Growth has slowed a bit off a big
base, but it’s still way ahead of the industry average.
Gaming is bouncing back, with the launch of the new RTX 5060
and DLSS4 showing there’s still plenty of consumer demand.
The main engine is data centers — Blackwell GPUs combined
with NVLink have become the global standard for AI
infrastructure, locking in NVIDIA’s leadership.
Emerging businesses are also growing fast. Bottom line, NVIDIA
is still in a golden cycle of high growth and strong profitability,
and in the short term it’s likely to keep pushing the stock to new
highs

6. Second, check profitability — gross margin, net income, and EPS to see if they’re solid, and whether any
one-off factors are skewing the numbers. I’ve already laid out the data for you, so let’s take a look
together
NVIDIA Q2 FY26 Profitability Overview Ward Capital Forum
Metric Q2 FY26 Q1 FY26 Q2 FY25 Q/Q Change Y/Y Change Notes
GAAP Gross Margin 72.4% 60.5% 75.1% +11.9 pts -2.7 pts
Strong margin recovery, still at
top - tier levels
Non - GAAP Gross Margin 72.7% 61.0% 75.7% +11.7 pts -3.0 pts Core profitability remains robust
Non - GAAP Gross Margin (ex -
H20 release)
72.3% 71.3% — +1.0 pt —
Excludes $180M H20 inventory
release
GAAP Net Income $26.4B $18.8B $16.6B +41% +59% Significant earnings growth
Non - GAAP Net Income $25.8B $19.9B $17.0B +30% +52%
Underlying profitability remains
strong
GAAP EPS (Diluted) $1.08 $0.76 $0.67 +42% +61% Strong EPS expansion
Non - GAAP EPS (Diluted) $1.05 $0.81 $0.68 +30% +54% Reflects core earnings power
Non-GAAP EPS (ex-H20release) $1.04 $0.96 — +8% —
EPS growth intact even without
one-time item

7. NVIDIA delivered a strong second quarter, with gross margin above 72%. Net income and earnings
per share both jumped more than 50% year over year, and even without one-time items,
profitability remains very solid

8. Third, look at the drivers — is the growth coming from real market demand or just financial adjustments?
And how are policy shifts and industry trends shaping the results?

9. NVIDIA Q2 FY26 Growth Drivers Ward Capital Forum
Category Key Drivers Nature Notes
Data Center (AI demand)
$41.1B revenue (+56% Y/Y, +5% Q/Q); strong uptake
of Blackwell GPUs and NVLink rack - scale systems
Market demand
Core growth engine, fueled by global AI
training & inference workloads
Gaming & AI PC
$4.3B revenue (+49% Y/Y); launch of RTX 5060,
adoption of DLSS 4
Market demand
Consumer AI - PC cycle boosting GPU
sales
Professional Visualization
$601M (+32% Y/Y); new RTX PRO GPUs, Siemens
partnership for digital factories
Market demand
Industrial AI and Omniverse ecosystem
expansion
Automotive & Robotics
$586M (+69% Y/Y); DRIVE AV platform, Jetson Thor
shipments
Market demand
Early - stage but rapid adoption in
auto/robotics
H20 Inventory Release $180M release of reserved H20 chips Financial adjustment
One - time margin/EPS boost (~0.4 pts
GM, ~$0.01 EPS)
H20 Sales (non - China) ~$650M sales to non - China customers
Market demand (with
policy impact)
Reflects U.S. export restrictions; demand
redirected outside China
Shareholder Returns
$24.3B returned in H1; new $60B buyback
authorization
Financial policy
Supports stock price, boosts investor
confidence
Policy/Regulation
U.S. ban on H20 exports to China; NVIDIA expanding
in U.S. & Europe AI infrastructure
Policy impact
Demand shifting to U.S./EU markets;
strong sovereign AI investments

10. Industry Trend: AI training and inference demand is growing
at an exponential pace, while Automotive and Robotics are
emerging as meaningful long-term growth drivers
Policy Shift: U.S. export restrictions on H20 constrain China
shipments, but strong demand from U.S. and global markets
is absorbing supply — accelerating NVIDIA’s push into
sovereign AI cloud initiatives in the U.S. and Europe.
Core Drivers: Data Center and AI PC are the primary growth
engines, powered by the Blackwell architecture and large-
scale AI infrastructure investments.

11. Fourth, check cash flow and financial structure — free cash flow, debt levels, and whether the company
has the ability to sustain long-term investment and returns
NVIDIA Q2 FY26 Cash Flow & Financial Structure Ward Capital Forum
Category Q2 FY26 Q1 FY26 Q2 FY25 Notes
Free Cash Flow (FCF) $13.5B $26.1B $13.5B
Strong cash generation, supports long -
term investments and shareholder returns
Operating Cash Flow $15.4B $27.4B $14.5B Stable inflows aligned with high profitability
Cash & Marketable Securities $56.8B $43.2B (beginning of FY) —
Ample liquidity to fund expansion and
buybacks
Total Debt $8.5B $8.5B —
Very low vs. cash balance, net cash
position
Shareholders’ Equity $100.1B $79.3B —
Significant growth in net assets, healthy
structure
Liabilities / Assets Ratio 29% 29% — Low leverage, manageable financial risk

12. ØRobust Cash Flow: Quarterly FCF above $13B provides
strong capacity for R&D and shareholder returns
ØHealthy Structure: Debt-to-asset ratio below 30%,
underscoring low leverage and high financial flexibility
ØAmple Reserves: $56.8B in cash and securities vs. $8.5B
in debt, resulting in a solid net cash balance sheet
ØStrong Long-Term Capacity: Well-positioned to fund AI
infrastructure expansion, execute the $60B buyback
program, and support new growth initiatives

13. NVIDIA Q3 FY26 Guidance Ward Capital Forum
Metric Guidance Market Read
Revenue $54B ±2% Slight beat vs. Street (~$53B)
Gross Margin (GAAP / Non - GAAP) 73.3% / 73.5% ±50 bps Pricing power intact, better than Q2
OpEx GAAP: ~$5.9B / Non - GAAP: ~$4.2B High - 30% growth; heavy AI/R&D spend
Other Income ~$500M Tailwind to EPS
Tax Rate ~16.5% ±1% Stable, predictable
Full - Year Margin Mid - 70% (Non - GAAP) Confirms long - term profitability
China Exposure No H20 shipments assumed Conservative but manageable
Fifth, look at management’s outlook — are their forecasts for the coming quarters or full year upbeat?
And compared to market expectations, are they being conservative or optimistic?
Guidance is better than expected on revenue and margins, while management keeps a cautious tone
on China. Long-term outlook remains bullish on AI demand and mid-70% margin profile

14. Sixth, factor in the market environment — industry competition, macro policies, valuation levels, and
potential risks
NVIDlA-Market Context & Risks(Q2 FY26) Ward Capital Forum
Factor Key Insights Investor Read
Industry Competition
NVIDIA remains dominant in AI GPUs; Blackwell architecture far ahead
of AMD/Intel. Competitors focusing on cost/alternative architectures
but lack comparable ecosystem.
Leadership intact, but watch rivals in AI accelerators
and custom chips (Google TPU, Amazon Trainium).
Macro Policy
U.S. export bans on H20 cut China shipments. Europe and U.S. moving
to build sovereign AI infrastructure with NVIDIA.
China risk contained; policy shifts push NVIDIA deeper
into Western AI clouds.
Valuation
Stock trades at a premium multiple (~35–40x forward EPS), reflecting
AI leadership.
High bar set; execution must remain flawless to justify
valuation.
Potential Risks
(1) Geopolitical — U.S.-China tech tensions. (2) Supply chain
constraints. (3) Rising R&D/OpEx (~+30% YoY). (4) Market rotation
away from AI hype.
Any slowdown in AI adoption or margin compression
could pressure multiples.

15. NVIDIA remains the clear leader in AI
infrastructure, underpinned by robust
demand across the U.S. and Europe. That
said, its premium valuation allows limited
room for missteps. Key risks to monitor
include geopolitical tensions, supply chain
execution, and rising R&D expenses
That’s the framework for analyzing a company’s report. I just walked you through it using NVIDIA as
the example. We can use the same approach to break down many other company reports. But once
we’ve got the analysis part nailed down, the next step is figuring out how to turn it into actual trades

16. ØMid-term strategy: Data centers and AI PCs are the core
growth engines. Demand for the Blackwell architecture is
extremely strong, so you can hold your position or look
to add another 5%–10% on pullbacks.
I’ll keep using NVIDIA to lay out the strategy options
ØShort-term strategy: NVIDIA is in a strong upcycle. The
earnings beat expectations, and the stock price is likely
to keep climbing into mid-September. This is a buy.
ØLong-term strategy: The automotive and robotics
businesses are just taking off, with the potential to
become the company’s next growth curve. This makes
NVIDIA worth watching for long-term investors

17. We’ve identified the money-making opportunities, but
now the question is how to manage risk and hedge. For
example, you can spread out the risk with ETFs like SOXX
or SMH, or go straight into related individual names for
targeted opportunities
In the semiconductor supply chain, you’ve got TSM, ASML,
and AMAT — all major beneficiaries of NVIDIA’s
ecosystem.
On the AI application side, companies like Microsoft
(MSFT), Google (GOOG), and Amazon (AMZN) are gaining
an edge in computing power as AI infrastructure
expansion picks up speed

18. Today we walked through NVIDIA’s
earnings and ran the full analysis
framework. What you’ll notice is this
method doesn’t just work for NVIDIA — it
can be applied to any company out there.
That’s what you get inside Ward Capital Forum:
the chance to learn a professional investment framework. And it’s not just about learning —
whenever the market presents a money-making opportunity, I’ll tell you when to buy and when to
sell, so you can turn that knowledge directly into profits
I believe if you keep following along here, you’ll eventually say, “It finally feels like investing
has become simple, and I’m actually making money.” At Ward Capital Forum, most of our
members have gone from knowing nothing about investing to trading on their own and truly
earning real profits

19. If you ever have any questions during your investment journey
or need extra support, feel free to reach out to us anytime.
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