Nvidia's stock experienced a significant rally, climbing nearly 9% on Thursday following its second-quarter earnings report. This surge added about $440 billion to the chip giant's market capitalization, bringing its total to $5.4 trillion. This performance broke a previous trend where Nvidia's stock had dropped the day after reporting earnings in the preceding four quarters, even when meeting or exceeding estimates. The positive investor reaction was largely driven by the company's strong revenue guidance, which reassured investors about the sustained demand for artificial intelligence chips. Several other chip stocks, including Broadcom and Intel, also saw rallies in response to Nvidia's optimistic outlook, while Nebius shares rose and CoreWeave remained flat.
Nvidia reported impressive financial results for the second quarter ended July 26, 2026, with revenue of $96.2 billion, marking a 106% increase from a year ago and an 18% increase from the previous quarter. Data Center revenue specifically reached $89.0 billion, up 117% year-over-year. The company's net income for the period was $59.69 billion, or $2.46 per share, significantly higher than $26.42 billion, or $1.08 per share, in the same quarter last year. Operating expenses, however, also saw a substantial increase, rising 55% to $8.41 billion. For the current quarter, Nvidia forecasts revenue to be approximately $108 billion, surpassing analysts' average forecast of $104.86 billion.
CEO Jensen Huang highlighted that AI has reached an "inflection point," with demand accelerating and now involving a broader range of companies needing large clusters of graphics processing units. CFO Colette Kress projected a 70% revenue growth for fiscal year 2028 (February 2027 to January 2028), though Huang noted that actual demand is "much greater than 70%" but constrained by supply limitations. These constraints are partly due to Taiwan Semiconductor Manufacturing Co., Nvidia's main manufacturer, and shortages of memory chips. Despite potential threats to Nvidia's near monopoly from custom semiconductors developed by hyperscalers and AI labs like OpenAI, analysts remain bullish, with some suggesting significant upside for the stock and no slowdown expected until 2028 at the earliest. Nvidia also emphasized the diversification of its customer base beyond just hyperscalers, with its AI Clouds, industrial, and enterprise customers accounting for $40.3 billion in sales, up 138% annually.
