Nvidia Reports 106% Revenue Growth, Huang Defends AI Investment Risk

Nvidia reported a 106% year-on-year rise in second-quarter fiscal 2027 revenue to $96.2 billion, as demand for artificial intelligence computing continued to drive growth.

Net income more than doubled to $59.7 billion, while diluted earnings per share rose 128% to $2.46 on a GAAP basis, according to the company’s earnings release.

Data centre revenue, Nvidia’s largest business, climbed 117% from a year earlier to $89 billion, up 18% from the previous quarter.

The company reported a GAAP gross margin of 75%, compared with 72.4% a year earlier.

Nvidia also returned about $26 billion to shareholders during the quarter through share repurchases and dividends. It had approximately $99 billion remaining under its share repurchase authorisation at the end of the quarter.

Huang Says AI Infra Buildout Is Accelerating

Nvidia founder and Chief Executive Officer (CEO) Jensen Huang said the company is seeing a broader and faster expansion of AI demand than during the early phase of the buildout.

"AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue," Huang said.

"Demand is accelerating. This time last year, one lab alone was driving the buildout; today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online — with strong momentum across the US and around the world," he added.

On the earnings call, Huang also defended Nvidia’s growing financial support for AI companies seeking to secure computing capacity.

He said many such companies are not investment grade and lack the financial track record to raise capital cheaply. Nvidia can therefore help them secure the infrastructure needed for the next stage of AI development, as per a report by CNBC.

Huang said Nvidia’s exposure would be limited because computing infrastructure funded through such arrangements can be redeployed across customers and workloads.

"The money we’ve invested is going to generate tremendous returns," he said. "I think the risk is low," he remarked, as per the report.

Nvidia Raises Growth Expectations

For the third quarter of fiscal 2027, Nvidia expects revenue of $108 billion, plus or minus 2%. The company said the outlook assumes no Data Centre compute revenue from China.

Chief Financial Officer (CFO) Colette Kress said Nvidia expects fiscal 2028 revenue growth of 70%, compared with analysts’ expectation of 44%, as per CNBC.

She said customer forecasts point to growth doubling next year, although the company continues to face supply constraints.

Shares Rise After Results

Nvidia shares rose about 4% in extended trading after the results, according to CNBC.

The stock had gained about 13% through Wednesday’s close, reflecting investor caution around the sustainability of the broader AI trade.