Key Points

Nvidia reported Q2 revenue of $96.2 billion, up 106% year over year, beating estimates of $92.27 billion.

Adjusted EPS of $2.22 beat the consensus of $2.09; data center revenue jumped 117% to $89 billion.

Q3 guidance of ~$108 billion and a fiscal 2028 growth forecast of ~70% topped analyst expectations of ~45%.

Nvidia's edge is expanding beyond GPUs into data orchestration hardware such as the Vera CPU and the Vera Rubin architecture.

Multiple analysts raised price targets after earnings; the consensus rating stands at "Moderate Buy" with an average target of $322.61.

Nvidia delivered blowout Q2 results on August 26, posting revenue of $96.22 billion against a Wall Street estimate of $92.27 billion. The stock opened at $217.55 on Friday.

Data center revenue led the way, climbing 117% year over year to $89 billion, reflecting continued heavy spending on AI infrastructure by the large cloud providers and hyperscalers that make up the bulk of Nvidia's customer base. Adjusted EPS came in at $2.22, beating the $2.09 consensus by $0.13. Total revenue rose 105.9% compared with the same quarter a year earlier. Return on equity reached 96.04%, with a net margin of 63.66%.

Management guided Q3 revenue to roughly $108 billion. The company also said fiscal 2028 sales could grow around 70%, well above the roughly 45% analysts had modeled — a signal that management expects the current AI infrastructure build-out to sustain demand well beyond the current upgrade cycle.

Several analysts responded by raising their price targets, including Wedbush, Truist, RBC, and JPMorgan. The average analyst price target now stands at $322.61, with 48 buy ratings and four holds.

Nvidia's Expanding Hardware Story

The broader narrative emerging from the earnings report is that Nvidia's advantage is no longer limited to GPUs. The company's Vera Rubin architecture combines the Rubin GPU with the Vera CPU, a Groq 3 LPX inference accelerator, and dedicated storage and networking racks. It marks a shift toward selling full data center systems rather than individual accelerators, a strategy that deepens Nvidia's integration into customer infrastructure but also raises per-deal commitments for buyers.

The Vera CPU is focused on data orchestration within large-scale data centers. Nvidia's VP of storage technology, Jason Hardy, said the chip delivered "upwards of 3x improvement" in certain operations, allowing flash storage to run at full capacity without bottlenecking.

As data centers scale up, delivering data to the GPU at the right time has become a genuine challenge. Nvidia is positioning its full system stack — not just individual chips — as the answer, competing not only with rival chipmakers but also with in-house silicon developed by its largest cloud customers.

Competition and Risk Factors

Nvidia still faces headwinds. Gross margins are expected to compress to around 72%-73% as memory, packaging, and infrastructure costs rise — a byproduct of the same AI demand that is driving revenue, since AI memory and advanced packaging capacity remain tight industry-wide.

Supply constraints remain a factor, potentially limiting how quickly strong demand converts into revenue. The company also excluded China data center compute revenue from its guidance, citing ongoing export control risks, a restriction that has curtailed Nvidia's access to one of its largest historical markets for successive chip generations.

There are also reports that Nvidia paused some revenue-sharing arrangements with AI cloud providers, raising questions about customer financing. Investors took some profits after the post-earnings rally, with NVDA sliding alongside AMD and Intel.

On the acquisition front, Nvidia is reportedly pursuing Hugging Face in a deal valued at roughly $12.9 billion, though terms are not finalized. Such a deal would extend Nvidia's reach beyond hardware into the open-source AI software ecosystem, where Hugging Face hosts models used widely across the industry.

Institutional investors own 65.27% of NVDA stock. Insiders have sold $410 million worth of stock over the past 90 days. The company announced an $80 billion share buyback program in May and declared a quarterly dividend of $0.25 per share, payable October 1.

The stock's 52-week range sits between $164.07 and $236.54, with a current market cap of $5.24 trillion. With Nvidia now among the largest companies by market value, its results have become a widely watched proxy for overall AI infrastructure spending, and upcoming quarters will show whether demand, margins, and supply can all keep pace.

Source: CoinCentral