Nvidia significantly exceeded Wall Street expectations for its second fiscal quarter of 2027 (May-July period), reporting $96.22 billion in revenue, more than double from the previous year, and surpassing analysts' average forecast of $92.27 billion. Net income surged to $59.69 billion, or $2.46 per share, compared to $26.42 billion, or $1.08 per share, in the same quarter last year. Non-GAAP earnings per share were $2.22, well above the FactSet consensus of $2.09 per share.
The company's data center segment, which includes AI data centers and hyperscaler demand, was a major growth driver, reporting $89 billion in revenue, more than double year-over-year. The edge computing segment also saw strong performance with $7.2 billion in revenue, a 27% increase. Despite these stellar results, operating expenses rose 55% to $8.41 billion. Nvidia CEO Jensen Huang stated that "AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue."
For the current quarter (August-October), Nvidia projected revenue of approximately $108 billion, exceeding analyst forecasts of $104.86 billion, which would represent an 89% increase from last year. However, the company guided gross margin down a full point to 74.0% for the October quarter. Cash flow from operations also saw a significant shift, with only $24.08 billion generated from $59.69 billion of GAAP net income, largely due to a substantial increase in receivables to $63.06 billion. Additionally, Nvidia issued $24.90 billion in debt and announced strategic partnerships with major financial institutions like Apollo, BlackRock, and Goldman Sachs to mobilize over $500 billion for AI infrastructure financing.
Despite the impressive financial performance and outlook, Nvidia's shares slipped 0.3% in after-hours trading and ended the regular session 1.6% lower. This comes amidst investor concerns about a potential market correction after a three-year boom that saw Nvidia's market value soar to approximately $5.2 trillion. The company's results have consistently beaten expectations, with its high-end chips becoming fundamental to AI development, yet skepticism about the long-term justification of massive AI spending and pushback against data center expansion persist. Nvidia's stock is a significant component of both the S&P 500 and Nasdaq-100, making its movements impactful on broader market indices.
