Nvidia’s shares went from sulking to soaring after its earnings call convinced investors it is still going to make a killing.
The chipmaker reported second-quarter revenue of $96.22 billion, up 106 per cent from a year earlier and ahead of the cocaine nose jobs of Wall Street, which expected about $92.17 billion. Adjusted earnings came in at $2.22 per share, compared with analyst estimates of about $2.10.
Data Centre carried most of the fireworks again. Revenue from the division hit $89 billion, up 117 per cent year on year and 18 per cent from the previous quarter. That comfortably beat expectations of about $85.08 billion, which meant the AI server racket kept behaving like a licence to print money.
Nvidia forecast third-quarter revenue of $108 billion, plus or minus two per cent, against consensus forecasts of about $104.19 billion. The forecast assumes no Data Centre compute revenue from China, leaving Chinese sales as extra if Washington lets more shipments through.
Despite this parade of silly numbers, Nvidia shares initially fell more than one per cent after the figures landed. Investors have become so used to Nvidia smashing expectations that merely producing spectacular results no longer seems to count as entertainment.
The shares stayed little changed for about 40 minutes after the report, while the market poked around for something to moan about. The grumble was gross margin. Nvidia reported a 75 per cent margin for the quarter, but expects about 74.77 per cent in the third quarter, which indicates how hard the cocaine-nosed jobs on Wall Street were looking for a reason to be miserable. Nvidia chief financial officer Colette Kress warned that soaring memory prices and higher component costs could push margins to roughly 71 to 72 per cent in the fourth quarter.
Then the earnings call began and the sulk evaporated.
Nvidia chief executive Jensen Huang and other executives painted a much punchier picture of Nvidia’s growth prospects. The shares then moved sharply higher in extended trading as investors remembered why they had been throwing money at AI infrastructure.
The big reveal was Nvidia’s forecast that revenue in fiscal 2028, ending January 2028, will grow by about 70 per cent. The cocaine nose jobs of Wall Street had expected growth of only about 44 per cent, so the projection landed rather harder than expected.
Huang pointed out that Nvidia normally does not give revenue guidance a year in advance, which made the forecast harder to dismiss as routine corporate froth. Even that forecast seems limited by what Nvidia can make. Kress told analysts that customer forecasts suggested Nvidia’s growth could double next year, but supply remains tight.
Huang said demand exceeded the 70 per cent growth Nvidia believed its supply chain could confidently deliver. Vera Rubin seems to be moving from slideware into real revenue at a fair clip.
Nvidia said its next-generation platform has begun shipping to customers and should account for about one-fifth of Data Centre revenue in the current quarter. Nvidia’s results announcement said Rubin is ramping into full production, with systems running at CoreWeave, Google Cloud, Microsoft Azure, Oracle and Nebius.
Nvidia said AWS will deploy another two million Nvidia GPUs across its global infrastructure during 2027 and 2028. That is rather more solid than the usual corporate burble about everything being brilliant, especially when buyers are still scrabbling for kit.
Nvidia said its customer base is broadening beyond the usual suspects. Demand is increasingly coming from AI laboratories, neocloud operators, enterprises, sovereign buyers and industrial customers.
AI labs alone are expected to account for roughly a quarter of Nvidia’s total business next year, which explains why nobody sensible is calling time yet. China remains the big unknown. Nvidia excluded Chinese Data Centre compute revenue entirely from its $108 billion third-quarter forecast.
Washington has begun allowing limited H200 shipments to some Chinese companies, but any meaningful restart would be on top of the guidance already issued. The change in sentiment was sharp. Nvidia shares climbed 4.2 per cent during the earnings call.
They were up nearly five per cent in extended trading as investors digested the longer-term forecasts. By Thursday morning, the gain had carried over from the overnight session and helped lift Asian semiconductor shares and US equity futures.
For now, investors seem willing to forgive the “weaker margins” caused by pricey memory if Nvidia keeps showing that AI demand is still accelerating. A company doubling quarterly revenue, forecasting $108 billion for the next quarter and talking up 70 per cent annual growth into fiscal 2028 is not exactly limping.
