Nvidia Stock Jumps as Earnings Beat Estimates, Revenue Outlook Hits $108B

Nvidia released its fiscal second-quarter results after the market closed Wednesday, with both revenue and earnings coming in above Wall Street expectations.

The chipmaker reported quarterly revenue of $96.2 billion, exceeding analysts’ consensus estimate of $92.27 billion. Data center revenue reached $89 billion, compared with forecasts of $85.4 billion, while earnings per share came in at $2.22 versus the expected $2.09.

Nvidia shares gained about 4% in after-hours trading following the results, while Bitcoin remained range-bound slightly above $78,000.

“AI has reached its inflection point,” Nvidia CEO Jensen Huang said, adding that computing has now become revenue and demand continues to accelerate.

For the fiscal third quarter, Nvidia projected revenue of $108 billion, above Wall Street’s $103.9 billion estimate. Crossing the $100 billion quarterly revenue mark would put Nvidia in a rare group, as only nine S&P 500 companies have previously reached that level.

However, the company expects its gross margin to decline to 74% next quarter from 75% in the second quarter. That weaker margin outlook may have limited the stock’s initial gains after the earnings announcement.

Thomas Monteiro, a senior analyst at Investing.com, said Nvidia’s results indicate increasing pressure on profitability as memory, financing and infrastructure expenses rise. He noted that the projected 74% margin for October would represent the first sequential decline of the current cycle.

Higher memory costs could also challenge expectations that Nvidia can sustain margins in the mid-70% range, Monteiro said.

He added that Nvidia may have less flexibility to pass those higher expenses on to customers as major technology companies themselves contend with rising spending requirements and borrowing costs.

Monteiro described the quarter as strong by most measures but said the results could prompt investors to reconsider Nvidia’s medium-term growth outlook.

He maintained that the long-term opportunity created by AI remains strong, but said the key question is how much of that growth ultimately converts into profit margins and cash flow.

During the earnings call, Huang addressed some of the supply and cost pressures facing the company.

He said Nvidia is working closely with memory suppliers while securing capacity for electricity, land and data-center infrastructure to meet demand that currently exceeds available supply.

Huang also pointed to a planned price increase in the first quarter. He argued that customers can achieve attractive returns from Nvidia’s systems, potentially giving the company greater flexibility to pass some rising costs on to buyers.