Nvidia revenue and EPS top estimates as shares fall on outlook and spending concerns

Nvidia reported quarterly results that modestly beat expectations on both revenue and earnings per share, while giving guidance that pointed to continued growth but also highlighted pressure on margins and uncertainty around China-related data center sales.

The company said revenue came in at $96.2 billion, roughly $4 billion above the midpoint of the pre-report consensus range, with earnings per share of $2.22. Gross margin was 75%, though Nvidia said it expects gross margin to be 74.0% in the next quarter. For the third quarter, the company said it sees revenue of $108 billion, a figure that implies roughly 12% sequential growth from the quarter just reported and sits above the range most analysts had modeled.

Nvidia also said Vera Rubin, its next-generation data center platform that follows Blackwell, is in full production, and Chief Executive Officer Jensen Huang said that "compute is revenue." The company said it is not assuming any data center compute revenue from China in its outlook, meaning the guidance includes no contribution from that market.

Nvidia said it will pay a dividend of $0.25 per share on Oct. 1. The company also said outgoing spending commitments have risen to as much as $279 billion from $119 billion, more than doubling, primarily in memory, a key component of the AI systems Nvidia sells.

Shares were down 3.5% in the initial reaction, trading at $205 per share, a decline that came despite the beats on both headline metrics and kept attention on the softer gross margin outlook and the jump in spending commitments.

Before the report, Wall Street had expected second-quarter revenue of about $91.9 billion to $92.3 billion, compared with Nvidia's guided range of $91.0 billion. Third-quarter revenue expectations were centered around $103 billion to $104 billion or more, with some expectations as high as $109 billion. Second-quarter EPS consensus was $2.08 to $2.09 per share, while gross margins were expected to hold in the mid-70% range.

Investors were also watching several other issues, including Blackwell and Vera Rubin shipment timelines, hyperscaler spending trends and durability, end-user demand, and criticism of circular financing, the debate over Nvidia's investments in AI-related companies that are themselves buyers of its chips. With Vera Rubin now in full production, gross margin guided to 74.0%, and China excluded from the outlook, those items frame the yardsticks against which the next quarter's results will be measured.

Calendar 2027 earnings consensus is $9.15, rising to $14.59 in 2028, a trajectory that embeds continued earnings growth well beyond the current fiscal year.

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