The Numbers That Mattered
Nvidia delivered one of the most extraordinary quarterly results in semiconductor history on August 26. The company reported $96.2 billion in revenue for fiscal Q2 2027, up 106% from $46.7 billion a year earlier, and well above its own $91 billion guidance. Earnings per share hit $2.22, a 111% year-over-year jump. Gross margin expanded to 75.0% from 72.7% a year ago.
But the numbers were almost secondary to the story CEO Jensen Huang told on the earnings call. "AI has reached its inflection point," he said. "It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue. And demand is accelerating."
Data Center Dominance
Data center revenue — the engine of Nvidia's growth — hit a company-record $89.0 billion, up 117% year over year. The segment broke down into two parts: hyperscaler revenue grew 102% to $48.7 billion, while the ACIE segment (AI Clouds, Industrial, and Enterprise) surged 138% to $40.3 billion.
Huang highlighted ACIE as a key differentiator: "Everybody sees hyperscalers. What you don't see is the tremendous opportunity outside the hyperscalers." Those customers need a flexible full stack rather than custom silicon, making them less vulnerable to competition from custom chips like OpenAI's Jalapeno.
Looking Ahead: $108B Q3 and 70% FY28 Growth
Management guided Q3 revenue of $108 billion, implying 89% year-over-year growth. For fiscal 2028, Nvidia projected 70% revenue growth — but Huang was emphatic that the figure is supply-constrained, not demand-constrained. "We have supply for 70% growth," he said. "Our demand is much higher than that."
CFO Colette Kress added that the company's backlog now exceeds $2 trillion, and forecast hyperscaler capital expenditure will grow from $800 billion in calendar 2026 to $1.3 trillion in 2027. She also disclosed that Nvidia's return on invested capital for AI data centers is now under one year.
Vera Rubin Already Shipping
Nvidia revealed that its next-generation Vera Rubin platform is in full production, with racks now running at key hyperscalers and neoclouds. Shipments began in early August — a cleaner handoff from Blackwell Ultra than many investors had feared.
Circular Financing Concerns
The earnings call confronted concerns about circular financing in the AI ecosystem. Nvidia recently established a $500 billion third-party financing mechanism with Apollo Global, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR. Kress defended the structure, noting that AI clouds and model makers are growing faster than their balance sheets can support.
The market initially reacted negatively after hours but reversed sharply as Kress spoke. NVDA closed up 8.7% on Thursday — its biggest one-day gain since April 2025 — lifting the S&P 500 and Nasdaq with it.
