NVIDIA Corporation (NVDA) shares climbed 2.23% to $221.30, gaining $4.83, as strong demand for AI computing capacity supported market momentum. The stock recovered from a midday selloff that took it close to $218 and moved back above the $221 level during the session.

The advance followed NVIDIA's latest earnings report, which cited record AI demand and sharply higher data center sales. The results and the company's expanding data center business highlighted its position in the AI semiconductor market. With data center sales dominating its results, the report offers a measure of how quickly AI computing capacity is being absorbed across the technology industry.

Data Center Revenue Surges as AI Demand Expands

NVIDIA reported fiscal second-quarter 2027 revenue of $96.2 billion, representing a 106% increase from the year-earlier period. The Data Center division generated $89 billion — roughly 92% of the company's total quarterly revenue. The performance reflected continued spending on computing infrastructure and advanced processors across the technology industry.

Profitability strengthened alongside the top line. Operating income increased 124% to $63.7 billion, and the company posted a gross margin of 75%, underscoring the earnings power of its semiconductor operations. NVIDIA also projected third-quarter revenue of approximately $108 billion, subject to a possible variation of 2% — a figure that sets a concrete benchmark for the company's next reported results.

The company's first-half operating cash flow reached $74.4 billion, providing financial support for its expanding business operations. NVIDIA also reported $279 billion in supply and capacity commitments, up sharply from $119 billion in the previous quarter. These commitments secure production capacity and future deliveries, although they simultaneously increase the company's financial obligations. How these commitments convert into delivered hardware and recognized revenue in coming quarters will provide a measure of whether AI-related demand holds at its current scale.

NVIDIA Expands Autonomous Driving Partnerships

Beyond the data center, NVIDIA continues to broaden its presence in automotive computing and autonomous driving technology. The company supplies processors and software platforms that support vehicle automation, processing, and driving systems. Its DRIVE Hyperion platform provides computing technology for manufacturers developing advanced vehicle capabilities.

In March, NVIDIA identified BYD, Geely, Isuzu, and Nissan as adopters of the DRIVE Hyperion platform. The partnerships extend the company's automotive technology network across several major vehicle manufacturers, and the platform supports the computing tasks required for autonomous navigation and vehicle system development.

NVIDIA's automotive operations remain substantially smaller than its established Data Center business. As a result, the company's financial performance continues to depend primarily on demand for AI processors and computing infrastructure. Automotive partnerships nonetheless provide additional commercial opportunities as manufacturers develop more advanced driving technology, and subsequent deployment progress by BYD, Geely, Isuzu, and Nissan will indicate whether the automotive segment grows into a more significant revenue contributor.

Valuation Reflects Strong Earnings Growth

NVIDIA traded at 28.51 times trailing earnings and approximately 24.88 times forward earnings. Its forward earnings multiple remained above the technology-sector median of 21.01, though the company's expanding earnings have reduced its valuation multiple compared with earlier periods. On July 31, 2025, NVIDIA's forward earnings multiple stood at 39.84, compared with 22.88 in July 2026. Tracking this multiple against the sector median provides a consistent yardstick for comparing NVIDIA's valuation with its industry peers over time.

Separately, hedge fund ownership of the company increased from 275 funds in the first quarter to 285 in the second quarter. Their combined holdings rose from $83.89 billion to $94.67 billion, reflecting increased institutional exposure.

NVIDIA's earnings growth continues to draw support from expanding demand for advanced AI computing products. Strong margins, cash generation, and revenue expansion demonstrate the financial scale of its semiconductor business. Autonomous driving partnerships, meanwhile, broaden the company's operations beyond data centers and strengthen its presence across emerging computing markets.

This article is based on a report originally published by Blockonomi: NVIDIA (NVDA) Stock: Hits $221 as AI Demand Supports Strong Earnings.