NVIDIA Q2 revenue more than doubles; 70% growth expected in FY2028

Nvidia Corp. (NASDAQ: NVDA ) posted a fiscal second-quarter beat and third-quarter guidance ahead of estimates on Wednesday afternoon, but the number that moved shares came from further out on the calendar. NVDA stock is up after earnings. See the chart and price action here. Revenue for the quarter reached $96.22 billion, up 106% from a year earlier and above the $92.17 billion analysts polled had projected, while adjusted earnings of $2.22 per share topped the $2.10 estimate. Third-quarter revenue guidance of $108 billion, plus or minus 2%, also cleared the $104.2 billion Wall Street had penciled in and would mark the first time the company has topped $100 billion in quarterly sales. Read Also: SpaceX Bulls Aren't Thinking Big Enough, Morgan Stanley Says 70% Revenue Growth in FY 2028 The bigger surprise came from CFO Colette Kress, who told analysts on the call that Nvidia expects fiscal 2028 revenue growth of 70%, well above the 44% analysts had been modeling. Customer forecasts, Kress said, “point to our growth doubling next year,” though she cautioned the guidance still reflects supply constraints rather than any softening in demand. Shares had slipped through the earnings release before turning higher in after-hours trading once Kress delivered that projection. Capital spending among Nvidia’s largest customers is set to climb sharply as well. Kress said capex among the “top five hyperscalers” is expected to rise to $1.3 trillion next year from $800 billion in 2026, underscoring how much of the AI buildout still runs through Nvidia’s order book. Margins Bottom Out in Q4 Margins tell a more complicated story. Nvidia said gross margin will decline before bottoming out in the fourth quarter of fiscal 2027, landing in a range of 71% to 72%, with memory prices cited as a key drag. Kress addressed the pressure head-on rather than sidestep it. “We want to be direct about this, rather than let it linger as an open question,” she said. “Memory scarcity today is being driven in large part by the AI buildout itself.” Nvidia has already leaned on its balance sheet to lock down parts, spending $145 billion in the first quarter alone to secure supply. Data center revenue, still the core of Nvidia’s business, rose 117% year over year to $89 billion, and now accounts for 92% of total sales. Net income climbed 126% to $59.7 billion, ahead of the $51.2 billion analysts had expected. The numbers cleared every bar Wall Street set. The question now is whether hyperscalers keep spending fast enough, and memory prices ease soon enough, to make Kress’s math hold up. NVDA Stock Price Activity: Nvidia stock was up 3.95% at $217.94 during after-hours trading Wednesday, according to Pro. Read Also: Synopsys Shares Slip Despite Strong Q3 Results: Details Photo: Shutterstock