Nvidia reported $96.2 billion in revenue for its fiscal second quarter, a 106% increase year-over-year and 18% higher than the prior quarter, driven by $89 billion in data center sales. The company also raised its third-quarter revenue guidance to $108 billion, with CEO Jensen Huang stating that AI demand has reached an “inflection point”, transitioning from experimentation to real-world deployment.
Shares rose 4.2% to 4.7% in after-hours and post-market trading following the announcement, as investors responded to the company’s long-term outlook. Nvidia projected 70% revenue growth for fiscal 2028, a rare forward-looking forecast that underscored confidence in sustained AI infrastructure spending. The company’s market capitalization reached $5.2 trillion, making it the world’s most valuable firm.
Key financial highlights:
- Net income surged 126% to $59.7 billion, up from $26.4 billion in the same period last year.
- Data center revenue grew 117% year-over-year, accounting for the vast majority of total revenue.
- Gross margins declined slightly from 75% to between 71% and 73%, attributed to rising memory costs.
- Third-quarter guidance of $108 billion excludes revenue from China, reflecting ongoing geopolitical constraints.
Nvidia’s results are widely viewed as a bellwether for the AI sector, given its dominance in high-performance computing chips. Major customers, including Microsoft and Meta, have signaled plans to spend over $730 billion on AI infrastructure in 2024, nearly double last year’s outlay. The company also expanded its partnership with Amazon Web Services, committing to deploy 2 million additional Nvidia graphics processors across AWS’s global infrastructure by 2028.
Broader market implications:
Analysts noted that Nvidia’s growth is broadening beyond hyperscalers, with demand increasing from AI labs, startups, and cloud providers. The company’s cloud revenue-sharing model was cited as a potential new catalyst for stock performance. Competitors like AMD have also benefited from the AI boom, with data center revenue surging 107% to $6.7 billion in its latest quarter, though Nvidia remains the dominant player.
The stock trades at 17.9 times forward earnings, significantly lower than rivals like AMD (37.2x) and Intel (46.2x), reflecting Nvidia’s outsized growth trajectory. Multiple brokerages, including Morgan Stanley, raised price targets on the shares following the results, with some projecting a potential upside to $280 from current levels.
Nvidia’s forward guidance marks a departure from its typical short-term outlook, signaling confidence in the longevity of the AI spending cycle. Executives emphasized that AI adoption is accelerating, with Huang stating that “compute is revenue” as the technology moves from experimental use to profitable applications.
Industry reactions:
Investors and analysts described the results as “amazing” and indicative of a “golden age” for AI infrastructure. However, some cautioned that supply bottlenecks and geopolitical risks, particularly in China, could pose challenges. The company’s ability to meet demand while managing rising costs will be closely watched in the coming quarters.
Nvidia’s earnings underscore the company’s central role in the global AI ecosystem, with its chips powering the majority of advanced AI models and data centers worldwide.