Nvidia Earnings: Chipmaker Forecasts Q3 Revenue at $108 Billion, Above Analysts' Estimates as Q2 Profit, Revenue Double YoY

Nvidia reported second-quarter results Wednesday, August 26, that once again exceeded Wall Street's expectations, with revenue for its computer chip business surging as demand for its high-end AI chips remained red-hot — the latest sign that global AI infrastructure spending shows no signs of slowing.

The Headline Numbers

Nvidia reported net income of $59.69 billion, or $2.46 per share, for the May-July period — more than double the $26.42 billion, or $1.08 per share, it reported in the same quarter last year. Revenue came in at $96.22 billion, up 106% year-over-year and well ahead of the $92.4 billion Wall Street had expected. Excluding certain items, adjusted earnings were $2.22 per share, comfortably above the $2.09 consensus forecast tracked by FactSet — marking the company's fourth straight quarter of accelerating revenue growth.

Data Center Remains the Engine

Data center revenue reached $89 billion, accounting for 92.7% of total sales, up 18% sequentially from the prior quarter. Within that segment, hyperscale revenue came in at $49 billion, while Nvidia's ACIE business — covering sovereign AI, regional cloud providers ("NeoClouds"), and enterprise customers — contributed $40 billion. The company said demand is increasingly broadening beyond the traditional hyperscaler customer base toward sovereign AI initiatives and enterprise buyers, a diversification Nvidia has been actively pursuing throughout the year.

Q3 Guidance Beats Expectations

For the current quarter, Nvidia forecast revenue of approximately $108 billion, plus or minus 2% — about $3.8 billion above the Street's $104.2-104.6 billion consensus estimate. Notably, that guidance assumes no Data Center compute revenue from China, meaning the strong outlook is being driven entirely by demand from the rest of the world, without any contribution from what remains a significant, unresolved market given ongoing export restrictions.

Margins Under Some Pressure

Nvidia guided for gross margins of 74%, plus or minus 50 basis points, for Q3 — down slightly from 75% in Q2. Management said it expects margins to bottom out in the 71-72% range in Q4, before recovering to 72-73% in fiscal year 2028 as previously announced price increases take effect. Executives attributed part of the margin pressure to industry-wide memory scarcity, explaining that unlike a typical cost input, tighter memory supply is itself a symptom of the same AI-driven demand surge fueling Nvidia's own growth. The company said it maintains "longstanding, deep relationships" with all three major memory suppliers and is working closely with them to expand capacity to meet its roadmap.

What's Next for Nvidia's Product Roadmap

CEO Jensen Huang highlighted the ramp of Nvidia's next-generation Vera Rubin chip, with racks already operating at partner facilities and full production targeted for Q3. Huang has projected that Vera Rubin will surpass the company's current Blackwell architecture and help unlock what he's described as a $200 billion CPU market opportunity. Management indicated that growth in hyperscale spending, in particular, is expected to re-accelerate in Q4 and into fiscal year 2028 as Vera Rubin supply expands further.

Market Reaction

Despite the across-the-board beat, Nvidia shares initially fell roughly 1-2% in after-hours trading — a reaction analysts attributed largely to the modest sequential dip in guided gross margin, given how accustomed investors have become to Nvidia's consistent outperformance, leaving comparatively little room for anything short of a flawless report to move the stock higher. Nvidia has beaten adjusted EPS estimates by 4-5% in each of the past four quarters, yet has still averaged a roughly 3% share-price decline in the week following its reports — a pattern some analysts have called the "sell the news" dynamic increasingly common for mega-cap AI stocks trading at elevated valuations.

The Bigger Picture

Based on Wednesday's closing price, Nvidia carries a market value of roughly $5.07 trillion, making it the world's most valuable company. The scale of the company's rise remains striking in historical terms: an investor who put €1,000 (about $1,160) into Nvidia stock at the end of 2019 would have seen that investment grow to nearly €36,000 today. Once known primarily among gamers for its graphics cards, Nvidia has transformed into the dominant supplier of the chips and systems used to train and run large AI models — a shift that has made its quarterly results one of the single most closely watched data points for the health of the broader AI investment cycle.

What's Next

With Q3 guidance already coming in well above expectations and Vera Rubin production ramping through the back half of the year, investors will be watching closely for whether Nvidia's next report continues the streak of upside surprises, or whether margin pressure and memory supply constraints begin to weigh more heavily on results. For Nvidia's full quarterly report, see the official NVIDIA Newsroom.

With revenue and profit both roughly doubling year-over-year and guidance once again topping Wall Street's estimates, Nvidia's latest results make clear that, for now at least, the AI infrastructure buildout the company sits at the center of shows no signs of slowing down.