Nvidia earnings takeaways: Huang forecasts 70% fiscal 2028 revenue growth, far above estimates
Nvidia reported better-than-expected results and issued guidance that sailed past analyst estimates.
TL;DR
- Nvidia reported fiscal second-quarter earnings per share of $2.22 (adjusted) versus an estimate of $2.10, and revenue of $96.22 billion versus an estimate of $92.17 billion.
- The company forecasts fiscal 2028 revenue growth of 70%, significantly exceeding analyst expectations of 44%.
- Amazon Web Services will purchase 2 million Nvidia GPUs and utilize Nvidia's new CPU, Vera, as part of a major deal.
- CEO Jensen Huang stated Nvidia has a $30 billion stake in OpenAI and expressed regret for not investing more and sooner in AI companies.
- Nvidia identified indebtedness as a risk factor, with $33.5 billion in senior notes outstanding and a $25 billion commercial paper program.
- Gross margins are expected to decline and bottom out in fiscal Q4 2027 at 71%-72% due to memory prices.
- Non-hyperscaler customers accounted for $40.3 billion in sales, up 138% year-over-year, while hyperscaler revenue more than doubled to $48.7 billion.
- Nvidia's supply commitments surged to $279 billion, primarily for memory procurement.
- Sales to China remain negligible, accounting for less than 1% of data center revenue.
- The company spent $26 billion on share repurchases and dividends during the quarter.
- SpaceX plans to build its AI data centers exclusively using Nvidia chips, including a space-optimized Vera Rubin NVL72 system.
- Nvidia's top customers, including Amazon, Alphabet, Tesla, and SpaceX, reported negative free cash flow in Q2.
- Nvidia expects third-quarter revenue of $108 billion, plus or minus 2%, exceeding analyst expectations of $104.2 billion.
- Memory prices are soaring globally due to shortages, impacting consumer GPU demand and driving up costs for Nvidia's systems.
- Nvidia has partnered with six financial firms to offer up to $500 billion in financing for AI chips, viewing them as an investable asset.