Nvidia reported an impressive $96.2 billion in revenue for the second quarter of fiscal 2027, which ended July 26, 2026. This figure represents a 106% increase year-over-year and an 18% jump from the previous quarter. The company's data center business was the primary driver, contributing $89.0 billion, a 117% year-over-year increase, and now accounting for over 92% of total revenue. CEO Jensen Huang highlighted that AI has reached an "inflection point," broadening demand beyond initial buyers to new labs, startups, and open-model ecosystems.
Despite these strong numbers, Wall Street's focus remains on future guidance and the sustainability of AI spending. Investors are particularly keen on CEO Jensen Huang's comments regarding capital expenditures by major customers, future demand projections, and the implications of recent financing deals. Earlier this month, Nvidia partnered with firms like Goldman Sachs and BlackRock to provide $500 billion in AI infrastructure financing and committed $105 billion to back an OpenAI data center campus in Ohio. Analysts like Shaon Baqui from Janus Henderson are looking for detailed explanations of these partnerships to address market concerns about the "circularity of financing.
For the third quarter of fiscal 2027, Nvidia guided revenue to approximately $108.0 billion, plus or minus 2%, a projection that excludes data center compute revenue from China due to export controls. This would mark Nvidia's first quarter exceeding $100 billion, a milestone demonstrating unprecedented growth for a chipmaker. However, the stock's performance this year, up 14%, lags behind previous years, reflecting investor caution amidst high inflation, rising interest rates, and geopolitical risks. Its valuation, at roughly 19 times earnings, is near its cheapest since late 2018, before the AI boom significantly inflated its market value.
Investors are also concerned about potential price increases for servers with Nvidia's AI chips, some of which are expected to rise by more than 15% due to surging memory costs. While Nvidia's earnings are a key barometer for the AI market, some analysts suggest the momentum might be shifting from semiconductors to other infrastructure components like memory and optics. However, updates on Nvidia's Vera Rubin and Blackwell chip sales, along with gross margin outlooks, are highly anticipated and could reinvigorate the broader AI trade.
