Key Takeaways
- Nvidia delivered Q2 revenue of $96.2 billion, surpassing analyst expectations of $92.27 billion, with EPS at $2.22 compared to the forecasted $2.09
- Data Center segment generated $89 billion in revenue, representing a 117% year-over-year increase and exceeding the $85.4 billion estimate
- The company projected Q3 revenue of $108 billion, significantly above Wall Street’s $103.9 billion consensus
- Q3 gross margin forecast of 74% represents a decline from Q2’s 75%, creating initial investor concern
- NVDA shares climbed approximately 4% during after-hours trading following the earnings announcement
Following Wednesday’s market close, Nvidia unveiled its fiscal second-quarter 2027 earnings, revealing revenue of $96.2 billion. This figure exceeded Wall Street’s consensus estimate of $92.27 billion and marked a remarkable 106% increase compared to the same quarter last year.
The stock closed at $209.76 during regular trading hours before gaining approximately 4% in extended trading after the company’s earnings conference call concluded.
On a non-GAAP basis, earnings per share reached $2.22, surpassing the analyst consensus of $2.09. The company’s GAAP net income more than doubled, reaching $59.7 billion for the quarter.
The Data Center segment emerged as the primary growth driver, generating $89 billion in quarterly revenue. This represented a 117% year-over-year surge and an 18% sequential increase from the previous quarter, comfortably exceeding the $85.4 billion analyst estimate.
Gross margins remained steady at 75% for both GAAP and non-GAAP measures during the quarter. The company also distributed approximately $26 billion to shareholders via stock repurchases and dividend payments, with roughly $99 billion remaining available under its buyback program.
During the investor call, CEO Jensen Huang made a bold statement: “AI has reached its inflection point. Now compute is revenue. And demand is accelerating.”
Q3 Revenue Forecast Exceeds $100 Billion Threshold
Looking ahead to the third quarter, Nvidia provided revenue guidance of $108 billion, with a variance of plus or minus 2%. This forecast exceeded the Street consensus of approximately $103.9 billion and positions Nvidia among an elite group. Just nine S&P 500 companies have historically reported quarterly revenue exceeding $100 billion.
The third-quarter projection excludes any Data Center compute revenue contributions from China, reflecting ongoing export restrictions affecting advanced AI processors. The company set gross margin guidance for the upcoming quarter at 74%, representing a one percentage point decline from Q2.
This margin compression initially triggered brief stock volatility following the earnings release before shares rebounded.
Thomas Monteiro, a senior analyst at Investing.com, highlighted that the 74% guidance represents the first sequential margin contraction during the current growth cycle. He identified increasing memory costs, financing expenses, and infrastructure investments as persistent headwinds.
Supply and Capacity Commitments Soar to $279 Billion
Nvidia’s supply and capacity obligations jumped dramatically to $279 billion as of July 26, compared to $119 billion in the previous quarter. This substantial increase stems primarily from memory procurement and manufacturing capacity investments for existing and upcoming product lines.
The commitment breakdown includes $92 billion payable during the remainder of fiscal 2027, $87 billion in fiscal 2028, and $88 billion in fiscal 2029.
CFO Colette Kress indicated that customer demand projections suggest potential growth doubling next year, although Nvidia anticipates approximately 70% growth due to supply chain limitations.
The company’s newest platform, Vera Rubin, achieved full production status during the quarter. It is currently operational across CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure, and Nebius.
Nvidia also unveiled strategic infrastructure collaborations with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR, with a collective target exceeding $500 billion for AI infrastructure development. These arrangements remain contingent upon finalized agreements.
Jensen announced a planned price increase scheduled for Q1, maintaining that customers can achieve substantial returns on investment from Nvidia systems.
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