Nvidia Beats Earnings Estimates, Projects $108 Billion in Revenue Next Quarter

Nvidia’s fiscal second quarter results came in well above Wall Street’s expectations, with the chipmaker posting $96.2 billion in total revenue against forecasts of $92.27 billion. Data center revenue alone reached $89 billion, beating estimates of $85.4 billion, while earnings per share hit $2.22 compared to the expected $2.09. Shares climbed roughly 4% in after-hours trading following the announcement.

CEO Says AI Demand Continues to Accelerate

Nvidia CEO Jensen Huang said artificial intelligence has reached a turning point where computing power is directly translating into revenue, describing demand as continuing to pick up speed. Looking ahead, the company guided third-quarter revenue to $108 billion, topping Street forecasts of $103.9 billion. Crossing the $100 billion mark in quarterly revenue would put Nvidia among a small handful of S&P 500 companies to ever hit that level.

Margin Pressure Raises Questions

Despite the strong headline numbers, Nvidia guided next quarter’s gross margin down to 74%, a dip from 75% in the most recent quarter, a detail that appeared to weigh on the stock immediately after results were released.

Analysts pointed to rising costs tied to memory, financing, and infrastructure as the main drivers behind the decline, marking the first sequential margin drop of the current growth cycle. Some also noted that major tech companies face their own rising costs, potentially limiting how much of that expense Nvidia can pass along to customers going forward.

During the earnings call, Huang addressed these pressures directly, saying the company is working closely with memory suppliers and locking down capacity across power, land, and data-center infrastructure to keep up with demand that currently outpaces supply. He also pointed to an upcoming price increase, arguing that customers still generate strong returns from Nvidia’s systems, potentially giving the company flexibility to offset higher costs.