Key Highlights

  • Q2 FY2027 Revenue rose 106% to $96.2 billion; Data Center revenue rose 117% to $89.0 billion (Aug 26 release).
  • Q3 guidance is $108.0 billion, plus or minus 2%, with no China Data Center compute revenue assumed; the CFO flagged about 70% growth for fiscal 2028.
  • Gross Margin is expected to dip to 71% to 72% in Q4 on memory costs, and Supply commitments jumped to $279 billion.
  • Nvidia holds the largest Nasdaq-100 weighting at about 12.75%; shares traded near $228.87 in the latest session after gaining about 13% year-to-date through late August.

Nvidia (NASDAQ:NVDA) remains the heavyweight of the artificial intelligence trade because its latest quarter showed Demand still accelerating at a scale no rival has matched. On Aug. 26, the chipmaker reported fiscal second-quarter revenue of $96.2 billion, up 106% from a year earlier and 18% from the prior quarter, with its Data Center Business alone delivering $89.0 billion.

The company also guided to third-quarter revenue of $108.0 billion, plus or minus 2%, and on its Earnings Call Chief Financial Officer Colette Kress said Nvidia expects fiscal 2028 revenue growth of about 70%, well above the roughly 44% analysts had been expecting. Shares rose nearly 9% on Aug. 27, adding about $440 billion in market value.

Nvidia is also the largest single weight in the Nasdaq-100 at about 12.75%, with the stock at $228.87 in the latest session. That weighting means its results now shape the direction of the broader technology benchmark almost as much as they shape sentiment around AI infrastructure spending.

Inside the $96.2 Billion Quarter

For the quarter ended July 26, 2026, Nvidia reported GAAP and non-GAAP gross margins of 75.0%. GAAP earnings per diluted share were $2.46, while non-GAAP earnings were $2.22. Analysts had expected adjusted earnings of $2.10 per share on revenue of $92.17 billion, so the company beat on both lines.

Data Center revenue of $89.0 billion rose 117% year over year. The company's Edge Computing segment, which includes PC and robotics-related products, generated $7.2 billion, up 27% from a year earlier. On the earnings call, management said hyperscale customers contributed about $49 billion, up 13% sequentially, while a broader group of AI clouds, industrial and enterprise customers contributed about $40 billion, up 138% year over year. Networking revenue grew 18% sequentially, and Spectrum-X Ethernet revenue grew 2.6 times from a year earlier. Sovereign AI revenue more than tripled year over year.

"AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue," founder and Chief Executive Officer Jensen Huang said in the release. He added that "demand is accelerating" and that Vera Rubin, "now in full production, was built to power exactly this moment."

Guidance, Margins and the Fiscal 2028 Target

Nvidia's third-quarter outlook calls for revenue of $108.0 billion, plus or minus 2%, and GAAP and non-GAAP gross margins of 74.0%, plus or minus 50 basis points. The company said it is not assuming any Data Center compute revenue from China in that outlook. Operating expenses are expected to be about $9.2 billion on a GAAP basis and $9.0 billion on a non-GAAP basis.

Margins are the main area where guidance softened. Management expects gross margin to bottom in the 71% to 72% range in the fourth quarter before settling at 72% to 73% in fiscal 2028, reflecting higher memory costs. Kress said customer forecasts "point to our growth doubling next year," but that guidance reflects supply constraints.

Capital returns remain large. Nvidia returned about $26.0 billion to shareholders in the second quarter through Buybacks and dividends and had roughly $99.0 billion left under its repurchase authorization at quarter-end. Its next quarterly Dividend of $0.25 per share is payable Oct. 1, 2026.

Vera Rubin and the Widening Platform

The quarter's product news reinforced Nvidia's push to sell complete AI systems rather than individual chips. The company said Vera Rubin racks are running at partners including CoreWeave (NASDAQ:CRWV), Google Cloud (NASDAQ:GOOGL), Microsoft Azure (NASDAQ:MSFT), Oracle Cloud Infrastructure (NYSE:ORCL) and Nebius (NASDAQ:NBIS). It also unveiled the Vera CPU, which it describes as the first CPU built for AI agents, said its Groq 3 LPX inference accelerator is in full production and began shipping Spectrum-6 switch systems.

Nvidia also announced partnerships with Apollo (NYSE:APO), BlackRock (NYSE:BLK), Blackstone (NYSE:BX), Brookfield (NYSE:BN), Goldman Sachs (NYSE:GS) and KKR (NYSE:KKR) to set up independent compute financing platforms that aim to mobilize more than $500 billion of third-party Capital for AI infrastructure over time. On the call, management said Amazon Web Services (NASDAQ:AMZN) would deploy an additional 2 million GPUs.

How Competitors Are Positioned

Nvidia still sets the pace in AI accelerators, but competition is building. Advanced Micro Devices (NASDAQ:AMD) and Google, whose tensor processing units power a growing share of its own AI work, are among the challengers. Hyperscalers including Amazon are also developing custom silicon with partners, and inference is becoming a more crowded field. So far, Nvidia's answer has been to widen its platform across CPUs, networking, software and financing, making its systems harder to replace wholesale.

The stock's performance before the report also showed that investors had grown more selective. Shares were up only 13% for the year as of the Aug. 26 close, after a historic three-year rally.

Risks Behind the Headline Numbers

Several risks sit behind the growth. Nvidia's supply commitments more than doubled from $119 billion to $279 billion in the quarter, primarily related to the procurement of memory, which raises the stakes if demand cools. Inventory rose to about $32 billion ahead of the Rubin ramp, and Days Sales Outstanding increased to 60 days, reflecting extended payment terms for large purchases.

Nvidia's quarterly filing added indebtedness as a standalone risk factor, noting $33.5 billion in senior notes outstanding and a $25 billion Commercial Paper program. China remains largely closed to its data center compute products, and its growing role in financing arrangements for customers ties part of its outlook to the health of the AI funding cycle. Customer concentration among a handful of hyperscalers and AI labs is another long-standing concern.

The Fiscal Third-Quarter Test

Nvidia pays its $0.25 dividend on Oct. 1, 2026. Its fiscal third quarter ends in late October, and the company typically reports those results in the second half of November, although it has not yet confirmed a date. That report will test whether revenue lands near the $108.0 billion target and how quickly gross margins move toward the 71% to 72% range management flagged for the fourth quarter.

Investors will also watch the pace of the Vera Rubin ramp, any change in China export conditions, memory pricing and progress on the $500 billion financing initiatives. With a Nasdaq-100 weighting of about 12.75%, those updates are likely to matter well beyond Nvidia's own share price.