Nvidia revenue tops $96 billion as AI chip demand accelerates and memory commitments reach $160 billion

Reviewed byNidhi Govil

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Nvidia delivered record-breaking Q2 results with $96.2 billion in revenue, up 106% year-over-year, driven by surging AI chip demand. CEO Jensen Huang declared AI has reached its inflection point as the company committed $160 billion to memory procurement and projected 70% revenue growth for fiscal 2028, despite ongoing supply constraints from TSMC and memory chip shortages.

Nvidia Posts Record $96.2 Billion Revenue Amid Explosive AI Chip Demand

Nvidia reported unprecedented financial results for the second quarter of fiscal 2027, ending July 26, 2026, with revenue reaching $96.2 billion—an 18% quarter-over-quarter increase and a staggering 106% year-over-year surge

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. The chipmaker's net income totaled $59.69 billion, more than doubling from $26.42 billion in the same quarter last year

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. Adjusted earnings came in at $2.22 per share, exceeding Wall Street expectations of $2.09 per share

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. These results demonstrate how strong AI chip demand continues to drive Nvidia's financial performance, with the company's gross margin reaching an impressive 75.0%

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Source: Market Screener

Source: Market Screener

Jensen Huang Declares AI Has Reached Its Inflection Point

"AI has reached its inflection point," declared Jensen Huang, Nvidia's founder and CEO, during the earnings announcement

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. Huang emphasized that artificial intelligence is now "doing useful work" with tokens that are "productive and profitable," marking a fundamental shift where "compute is revenue"

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. The CEO highlighted the emergence of multiple frontier AI labs scaling in parallel, a thriving open-model ecosystem, and physical AI coming online

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. The AI infrastructure buildout is "at full steam," with Nvidia's new Vera Rubin chip now in full production to power this transformative moment

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Source: Benzinga

Source: Benzinga

Data Center Sales Drive AI-Driven Growth Across Customer Segments

Nvidia's Compute & Networking hardware sales reached $88.3 billion, up 18% sequentially and 114% year-over-year

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. Data center customers purchased $89 billion worth of AI chips, representing a 117% increase compared to the same quarter last year

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. Hyperscalers acquired $48.7 billion worth of hardware, up 102% year-over-year and 13% quarter-over-quarter

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. Notably, revenue from AI Clouds, Industrial and Enterprise customers climbed to $40.3 billion, surging 138% year-over-year and 25% quarter-over-quarter

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. This faster growth rate in the ACIE segment signals that AI demand is broadening beyond hyperscalers to include expanding capacity at firms such as CoreWeave and Nebius, along with a deeper partnership with Amazon Web Services

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Massive $160 Billion Memory Commitments Signal Long-Term Supply Strategy

Nvidia dramatically increased its long-term purchase commitments from $119 billion in Q1 fiscal 2027 to $279 billion in the second quarter, with the bulk "primarily related to the procurement of memory"

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. These commitments include a memory supply pact with SK hynix and represent a strategic move to ensure shipment growth rather than precautionary inventory-building

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. The company is effectively reserving memory chips and other capacity because it expects AI demand to exceed what the supply chain can deliver through at least the end of fiscal 2028

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. These massive commitments underscore the ongoing supply constraints facing both TSMC, Nvidia's main manufacturer, and memory chip producers

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Source: Market Screener

Source: Market Screener

Revenue Guidance Projects 70% Growth Despite Supply Bottlenecks

For the third quarter of fiscal 2027, Nvidia expects revenue of approximately $108 billion, plus or minus 2%, surpassing Wall Street expectations of $104.86 billion

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. CFO Colette Kress revealed that the company expects revenue growth of 70% for fiscal 2028, which runs from February 2027 to January 2028

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. Jensen Huang emphasized that demand "is much greater than 70%," but supply constraints limit what the company can deliver

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. "Even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%. The unconstrained would be a lot, a lot higher," Huang explained

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. Kress noted that "customers' forecasts point to our growth doubling next year," confirming that the AI spending boom remains intact

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. The company's management explicitly stated that supply will remain a bottleneck at least through fiscal 2028

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Market Response and Analyst Outlook on AI Infrastructure Investment

Nvidia shares rose approximately 6% in premarket trading on Thursday as investors embraced the chipmaker's strong long-term outlook

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. Following the results, at least 10 brokerages raised their price targets on the shares

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. Morgan Stanley analysts stated that "70% growth supply constrained is a remarkable figure," and noted that Nvidia's push into cloud revenue-sharing could become a fresh catalyst for the stock. The forecast offers fresh ammunition to bulls after Nvidia's shares fell nearly 12% from their May peak as investors increasingly demanded evidence that the AI spending boom would last

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. The stock trades at 17.9 times forward earnings estimates, well below Advanced Micro Devices' 37.2 times and Intel's 46.2 times

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. Analysts also pointed to potential threats from custom semiconductors built by hyperscalers and AI labs like OpenAI, though these concerns were overshadowed by the strong revenue guidance

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. The company's outlook excludes data center compute revenue from China due to uncertainties with export restrictions and import licenses

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