Nvidia has once again given Wall Street a staggering set of numbers to process. The chip giant generated a record $96.2 billion in quarterly revenue as demand for artificial intelligence infrastructure continued to accelerate.
Investors initially showed some hesitation after the results landed, but that caution did not last long. Nvidia shares surged 8.7% on August 27 as its outlook convinced investors that the global AI spending boom still has plenty of room to run. The financial results help explain the excitement. Revenue for Nvidia’s fiscal second quarter of 2027 jumped 106% from a year earlier, more than doubling from the $46.7 billion reported in the same quarter last year.
Nvidia also produced $59.69 billion in GAAP net income, up 126% from a year earlier. Diluted earnings per share reached $2.46, compared with $1.08 during the same period last year.
Nvidia’s Data Center Business Keeps Breaking Records
Those numbers show just how much money companies are pouring into AI computing. Hyperscalers, AI laboratories, cloud providers, enterprises, startups, and governments are all building infrastructure capable of training and running increasingly powerful AI systems.
Chief Executive Jensen Huang says AI has reached a point where it is producing useful and profitable work. That shift is encouraging customers to invest heavily in the computing systems required to develop and operate AI services. Nvidia sits at the center of that spending because its graphics processors and networking systems power many of the world’s largest AI data centers. The company has also expanded beyond individual chips by selling more complete computing platforms.
Its current Blackwell systems remain important, but attention is quickly moving toward the next generation Vera Rubin platform. Nvidia said Vera Rubin is now ramping into full production, with systems already running at several major cloud partners.
Supply pressure is especially noticeable around advanced memory components. Nvidia expects tight availability and higher costs to create some pressure on margins as customers race to secure the hardware needed for new AI systems.
A Huge Forecast Sent Nvidia Stock Surging
The biggest surprise was not simply Nvidia’s record quarter. Management also gave investors a remarkably strong view of how much larger the company could become over the next fiscal year.
Nvidia expects revenue to grow about 70% in fiscal 2028, which ends in January 2028. That forecast came in far above Wall Street expectations and suggested annual sales could approach the $700 billion level.
The projection quickly changed the mood around Nvidia stock. Shares climbed 8.7% on August 27, helping lift the Nasdaq and other semiconductor stocks as investors returned to companies closely connected with AI infrastructure spending. The rally also eased concerns that technology companies might be reaching the limits of their AI budgets. Nvidia’s results instead suggested that demand for computing power remains intense as more companies build and expand large AI data centers.
Wall Street responded enthusiastically. At least 16 brokerages raised their Nvidia price targets after the earnings report, according to Reuters, as analysts pointed to stronger growth and the coming expansion of Vera Rubin systems.
Strong Profits Come With a Few Reasons for Caution
Its GAAP gross margin reached 75%, compared with 72.4% one year earlier. That means Nvidia kept roughly three-quarters of its revenue as gross profit before operating expenses and other costs were considered.
However, management expects some pressure ahead. Nvidia forecast a gross margin of about 74%, plus or minus half a percentage point, for its fiscal third quarter as component costs and supply conditions affect profitability.
The company also generated $21.34 billion in free cash flow during the quarter. That figure remains huge, but it came in well below GAAP net income of $59.69 billion. Working capital helps explain part of that difference.