Nvidia revenue jumps 106% to $96.2B as margin outlook resets

Nvidia reported fiscal second-quarter revenue of $96.2 billion, up 106% from a year earlier, as AI infrastructure demand accelerated across data centers.

"AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue," Jensen Huang, founder and CEO of Nvidia, said. "And demand is accelerating."

Data Center revenue rose 117% year over year to $89.0 billion, while Edge Computing revenue climbed 27% to $7.2 billion. GAAP earnings per share came in at $2.46, with non-GAAP EPS at $2.22. Gross margin held at 75.0% on both GAAP and non-GAAP bases. The company guided third-quarter revenue to $108.0 billion, plus or minus 2%, and expects gross margin of 74.0% plus or minus 50 basis points.

The margin outlook marks a reset. Huang said the company decided to "rip the band-aid off" on gross margins, guiding to 72%-73% for next year, down from the current 75.0%. CFO Colette Kress cited extreme memory pricing increases as the main pressure point, with supply chain bottlenecks limiting growth rather than demand, which she said is "substantially higher" than can be met. The company expects fiscal 2028 revenue growth of roughly 70%.

Vera Rubin, Nvidia's next-generation AI platform, is now in full production, with racks running at CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius. The company also unveiled the Vera CPU, built for AI agents, and the Spectrum-6 switch systems supporting gigascale AI factories. Nvidia said its Blackwell GPUs led across every category in the MLPerf Training 6.0 benchmarks, and its GPUs with Confidential Computing now handle inference in Apple's Private Cloud Compute. The company also partnered with Japan's government and industrial leaders to launch the world's first national AI infrastructure.

Nvidia returned approximately $26.0 billion to shareholders in the second quarter through buybacks and dividends, and has about $99.0 billion remaining under its repurchase authorization. The company also announced partnerships with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR to mobilize over $500 billion of third-party capital for AI infrastructure financing. AWS plans to deploy 2 million Nvidia GPUs under an expanded partnership.

The margin compression means profitability will tighten even as revenue growth accelerates, a trade-off investors will weigh against the company's dominant position in AI compute. The next test comes with the third-quarter report, expected in November, which will show whether the 74.0% gross margin guide holds as Vera Rubin ramps into full production.

This article is for informational purposes only and does not constitute investment advice.