Nvidia delivered its most emphatic answer yet to doubts about the durability of artificial-intelligence spending, reporting fiscal second-quarter revenue of $96.2 billion and telling investors to expect another 70% jump in sales through fiscal 2028 — a forecast well above what Wall Street had been modeling.
The results, released Wednesday after the close of trading and detailed in a filing with the Securities and Exchange Commission, showed revenue up 106% from a year earlier and 18% from the prior quarter. Data center revenue, the business most closely tied to the AI infrastructure build-out, reached $89.0 billion, up 117% year over year. Gross margin held at 75.0% on both a GAAP and non-GAAP basis. Diluted earnings came to $2.46 a share under generally accepted accounting principles and $2.22 on an adjusted basis, beating the $2.09 analysts had expected, according to estimates cited by Yahoo Finance.
A Growth Forecast That Outran Estimates
More striking than the quarter itself was what came next: Nvidia guided to third-quarter revenue of $108.0 billion, plus or minus 2%, with gross margin expected near 74%, and projected that full-year revenue would grow 70% in fiscal 2028 — far above the roughly 44% growth analysts had penciled in, according to CNBC's coverage of the earnings call. Nvidia also returned roughly $26.0 billion to shareholders during the quarter through buybacks and dividends.
Chief Executive Jensen Huang framed the results as evidence that AI spending has moved past its experimental phase.
"AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue."
Jensen Huang, CEO, Nvidia
Huang also pointed to what he called "a golden age of new AI labs and start-ups," citing frontier-model developers, an expanding open-model ecosystem and early demand from physical-AI and robotics customers as growth drivers beyond the hyperscale cloud providers that have accounted for most of Nvidia's revenue to date.
The numbers matter beyond Nvidia's own balance sheet. The company's results are widely read as a proxy for the broader AI capital-spending cycle, in which cloud providers, sovereign-backed data-center projects and a widening circle of AI startups have committed hundreds of billions of dollars to computing infrastructure. Skeptics have spent much of the year questioning whether that spending is sustainable, pointing to circular financing arrangements between chipmakers and their largest customers and to the capital being diverted from other corporate priorities into GPU purchases. Nvidia's guidance offered the clearest rebuttal so far from the industry's dominant supplier.
Markets Cheer, Then Pause
Investors responded emphatically. Nvidia shares jumped 8.7% on Thursday, powering a broad rally that lifted the Dow Jones Industrial Average 0.2% to 53,569.44, the S&P 500 0.7% to 7,730.99, and the Nasdaq Composite 1.6% to 26,541.35. The Technology Select Sector SPDR Fund, a proxy for chip and software stocks, gained 3.2% on the day.
The enthusiasm proved short-lived. By Friday, attention had shifted to Federal Reserve Chair Kevin Warsh's hawkish remarks at the Jackson Hole symposium, which pushed September rate-hike odds sharply higher and pulled the major indexes modestly lower to close the week. Even so, all three indexes finished the five trading days with gains, and Nvidia's report reset the baseline for how analysts model AI-related capital spending heading into next year.
Attention now turns to how Nvidia's largest customers calibrate their own capital budgets when they next report, and to whether the supply chain underneath them — including memory makers already straining to keep pace with demand — can support a fiscal 2028 in which Nvidia alone is projecting revenue well above $150 billion. Wall Street's immediate verdict, delivered in Thursday's rally, was that the bet is worth backing; the coming quarters will test whether the underlying demand justifies it.
