The company’s fiscal second-quarter report marked another period of record revenue and operating profit, with sales surging 56% from a year earlier in the period ended in July. That is actually the slowest growth rate that Nvidia has reported in more than two years, but it still vastly exceeds what other megacap tech companies are currently managing. And that is with sales of AI chips to China effectively shut off owing to national-security concerns.

Nvidia’s growth potential remains an important area of interest for investors—and the market at large. After a moment of panic earlier this year as President Trump kicked off his trade war, Nvidia has come roaring back. By Wednesday’s close, the stock was up 65% since Trump’s “Liberation Day” event on April 2, compared with average gains of 27% for Microsoft, Amazon.com, Meta Platforms and Google’s parent, Alphabet. Those happen to be the companies spending the most in snapping up Nvidia’s chips to build their own AI services.

Nvidia is now the only public company with a market cap exceeding $4 trillion. That sets an awfully high bar that even strong numbers don’t always meet. Nvidia’s data center segment revenue surged 56% year over year to a little over $41 billion in the recent quarter. But that still fell a bit short of Wall Street’s projections, sending the stock down about 3% in after-hours trading.

Nvidia’s outlook remains strong. The company expects to add about $7.3 billion in revenue in the current quarter—its largest sequential jump ever—with its Blackwell chip family in hot demand.

China remains a major question mark. Nvidia seemed to score a major victory last month when the Trump administration reversed course and said Nvidia could sell its H20 chip to the Chinese market. But the company disclosed Wednesday that it hasn’t shipped any of those chips and might not in the current quarter “as we continue to work through geopolitical issues.” Nvidia added that it has yet to see any published regulations regarding the 15% cut the Trump administration has demanded of any sales of AI chips to China.

In essence, the quarter was a good reminder both of Nvidia’s competitive strengths and the particularly thorny position the company now occupies in the crosshairs of a global trade war. More than two years after the launch of ChatGPT set off an explosion of AI investments, Nvidia remains the undisputed leader in the types of chips needed to power generative AI services. And its position is strong enough to maintain premium pricing power. Nvidia’s gross margin hit 72.4% in the latest quarter and is expected to end the current fiscal year in January in the mid-70% range. Nvidia averaged gross margins in the low 60% range in the years before ChatGPT’s launch.

But that pricing power could still be dented. Competition continues to grow from rivals, such as Advanced Micro Devices; chips designed in-house by major customers, such as Amazon and Google; and even a wave of startups that see an opportunity in Nvidia’s margins. The cost of doing business in a global trade war could keep rising as well, especially if Nvidia tries to get approval to sell a version of its popular Blackwell chips in China. Nvidia’s life as an AI kingmaker also means the crown sometimes lies heavy.

Write to Dan Gallagher at dan.gallagher@wsj.com