Nvidia, a leader in AI semiconductors, reported second-quarter earnings that surpassed market expectations, marking the company's 13th consecutive quarter of record revenue. This performance is seen as a positive sign that the investment boom in AI infrastructure will continue.
On August 26, after the market closed, Nvidia announced that its revenue for the second quarter of fiscal year 2027 (May to July 2026) reached $96.22 billion, a nearly 18% increase from the previous quarter's record of $81.62 billion and a 106% surge compared to the same period last year. This figure also exceeded the market research firm LSEG's forecast of $92.18 billion. During the same period, earnings per share (EPS) were reported at $2.22, surpassing the market expectation of $2.10.
The data center segment, driven by AI, was the primary contributor to this performance. Data center revenue soared 117% year-over-year to $89 billion. Notably, sales to hyperscale customers such as Google, Microsoft, and Amazon increased by 102% year-over-year to $48.7 billion, accounting for about 55% of total data center revenue.
Nvidia also expressed optimism for future performance, projecting third-quarter revenue of $108 billion, which exceeds the market consensus of approximately $104 billion to $105 billion.
Long-term growth prospects remain positive. Colette Kress, Nvidia's Chief Financial Officer, forecasted that revenue for fiscal year 2028 would increase by about 70% compared to the previous year, significantly higher than the existing market estimate of around 45%. This reflects confidence that investments in AI data centers will remain strong for the foreseeable future.
Nvidia CEO Jensen Huang stated, "AI has reached a turning point. It is now performing useful tasks," adding, "Computing is revenue."
Huang also expressed confidence in the next-generation AI platform, 'Vera Rubin,' stating, "The construction of AI infrastructure is currently in full swing," and emphasized that Vera Rubin, which has entered mass production, was created to support this moment.
Despite concerns about a slowdown in AI investment and potential market bubbles, Nvidia's stock rose 4.71% in after-hours trading.
However, uncertainties surrounding Nvidia's performance remain.
One concern is the rising prices of memory semiconductors needed for AI processors, which could impact profitability. Nvidia projected a gross margin of 74% for the third quarter, slightly down from 75% in the second quarter. Kress indicated that margins could drop to 71-72% in the fourth quarter before stabilizing at 72-73% for fiscal year 2028.
Additionally, accounts receivable for the second quarter increased to $63 billion, up significantly from $38.5 billion six months ago. This has raised market concerns about a 'circular finance' structure, where Nvidia's investments and financial support for AI companies lead back to chip purchases from Nvidia.
Geopolitical risks related to operations in China also pose a variable. Nvidia reported that sales of its older AI chip, the Hopper series H200, accounted for less than 1% of data center revenue in China during the second quarter. The company noted that the current shipments of Hopper products to China are diluting its overall gross margin. Nvidia did not include Chinese data center revenue in its third-quarter performance forecast.
* This article has been translated by AI.
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