What Happened?
Shares of leading designer of graphics chips Nvidia (NASDAQ: NVDA) jumped 8.3% in the afternoon session after the company reported second-quarter financial results that topped Wall Street expectations and projected 70% revenue growth for the next year (fiscal 2028).
According to a company press release and earnings commentary, Nvidia reported revenue of $96.22 billion for the second quarter, up 106% year-over-year, alongside adjusted earnings per share of $2.22. Both figures surpassed Wall Street consensus estimates, which called for revenue of $92.37 billion and adjusted earnings of $2.09 per share. Growth was driven by unprecedented momentum in Data Center sales, which increased 18% sequentially to reach $89.0 billion. The underlying profitability was also incredibly strong, as adjusted operating income surged 124% year-over-year to $63.96 billion and operating margin expanded to 66.2% from 60.8% a year ago.
CEO Jensen Huang emphasized that rapid adoption of AI models is fueling massive infrastructure investments, noting accelerated growth not just from traditional hyperscalers, but from enterprise, sovereign, and AI-native start-up customers rapidly deploying Nvidia’s full-stack solutions. Furthermore, the networking segment posted record sequential growth powered by Spectrum-X Ethernet and InfiniBand, while the company’s new Vera CPU is expected to see revenue more than double next year.
Looking ahead, management guided for third-quarter revenue of $108 billion at the midpoint, comfortably above analysts' expectations of $104.6 billion. The chipmaker also projected 70% revenue growth for fiscal year 2028, reinforcing investor confidence in the sustained demand for artificial intelligence hardware.
Crucially, CFO Colette Kress explained that customer forecasts actually point to potential growth rates near double the guided 70%, but severe supply chain bottlenecks—ranging from memory availability to data center power and construction—are capping the company's near-term output. To secure long-term demand and alleviate these constraints, Nvidia highlighted new strategic revenue-sharing structures with "NeoCloud" partners to facilitate infrastructure financing and establish massive recurring revenue streams.
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What Is The Market Telling Us
Nvidia’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock gained 3% on the news that a wave of upbeat earnings reports and bullish forecasts from key industry players signaled robust and sustained demand for artificial intelligence technology. The rally was sparked by strong quarterly results from several AI-related firms, reinforcing investor confidence in the sector. Super Micro Computer, a seller of servers and other AI equipment, saw its shares jump after its earnings per share came in 84% higher than expected and it provided a revenue forecast that topped estimates. Similarly, CoreWeave, which provides cloud computing for AI systems, rallied after its sales forecast also exceeded expectations. This positive sentiment echoed globally, with Asian markets gaining as traders bought into AI- and semiconductor-related shares. The optimism is further supported by fundamental data, such as a reported 155% year-over-year surge in South Korea's semiconductor exports for early August. AI racks consume GPUs, CPUs, high-bandwidth memory, and storage. When a large server OEM and a major AI cloud operator both lift the path of future shipments, investors typically reprice the chip makers that supply those systems which helps explain the gains in Nvidia, AMD, and Intel.
Nvidia is up 21.6% since the beginning of the year, and at $229.73 per share, it is trading close to its 52-week high of $235.74 from May 2026. Investors who bought $1,000 worth of Nvidia’s shares 5 years ago would now be looking at an investment worth $10,149.
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