Nvidia reported second-quarter FY2027 revenue of $96.2 billion, exceeding Wall Street estimates by $4.3 billion and marking the 15th consecutive quarter of earnings beats. Earnings per share reached $2.22, a 6.7% upside versus consensus. Shares rose 9.7% to $229.96 following the guidance announcement.
Data center revenue, the company’s primary growth engine, surged 117% year-on-year to $89 billion, accounting for 92.7% of total revenue. Gross margins remained at 75% in Q2 but are projected to ease to 74% in Q3, 71–72% in Q4, and stabilize at 72–73% in FY2028 amid rising memory costs. The company returned a record $26 billion to shareholders in Q2, split between $20 billion in buybacks and $6 billion in dividends, representing 60% of free cash flow.
FY2028 guidance calls for revenue growth of approximately 70%, nearly doubling the 45% consensus estimate and implying annualized revenue approaching $560 billion. Q3 revenue is guided to $108 billion, compared with a $104 billion consensus. Analysts project FY2027 EPS at $9.05 and FY2028 EPS at $12.57, translating to a forward earnings multiple of roughly 25x.
Capital investments remain substantial, with nearly $50 billion allocated to Frontier AI labs and partnerships to raise over $500 billion in third-party capital. The Vera Rubin GPU platform is on track for Q3 deliveries and is expected to contribute about 20% of data center revenue in the current quarter. The Vera CPU has entered full production, and AWS has committed to deploying 2 million additional GPUs, including Vera CPUs, through Q2 FY2029.
Sovereign AI demand grew 35% quarter-on-quarter and tripled year-on-year, with NeoCloud targeting 8 gigawatts of capacity by year-end. Hyperscaler cloud backlogs exceed $2 trillion, while top players are projected to spend $1.3 trillion in capital expenditures by 2027.
Analysts have raised price targets following the results. Raymond James lifted its target to $515 with a Strong Buy rating, while RBC Capital raised its target to $330 with an Outperform rating. The next earnings release is scheduled for November 25, 2026, with estimates calling for EPS of $2.36 and revenue of $104 billion.
Risks include structural competition from custom ASIC chips developed by hyperscalers such as Google, Amazon, and Meta, as well as geopolitical and regulatory scrutiny over suspected chip smuggling to China via Singapore.
