Nvidia's $96.2bn quarter and bullish 2028 guidance eased some fears about an AI bubble — but its reliance on a handful of big customers, and a cautious re-entry into China, suggest the picture is more complicated.
Nvidia blew past Wall Street's expectations on Wednesday, posting $96.2 billion (€82.4bn) in quarterly revenue against a forecast $92.2 billion (€79bn) — and then raised the bar again, guiding next quarter to $108 billion (€92.5bn), also above estimates.
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"AI has reached its inflection point," Huang said in a statement. "It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue, and demand is accelerating."
The company also gave a bullish outlook for fiscal 2028, with chief financial officer Colette Kress telling analysts on a post-earnings call that Nvidia expects to grow revenue by roughly 70% that year — well above the 45% analysts had projected.
"Incredibly, we are seeing demand acceleration even at our scale," she said. "Customers' forecasts point to our growth doubling next year."
Days on which Nvidia reports its quarterly results have an outsized importance for the world's most valuable company.
At a market capitalisation north of $5 trillion (€4.3tn), it is worth more than the GDP of Japan, the fourth largest economy.
Shares initially fell 1.8% in after-hours trading following the earnings release, after ending the regular session 1.6% lower.
But the stock reversed course and rose more than 4% in late trading once Kress's remarks on the call landed, as investors seized on the stronger-than-expected outlook.
Adjusted profit for the quarter came in at $2.22 a share, above the $2.09 analysts had expected.
The concentration problem
The main concern around Nvidia is not whether it can grow, it is more of a question of who it is growing for.
The firm still draws the bulk of its revenue from Amazon, Google and Microsoft, each of which is now designing its own chips to reduce reliance on the company. The new disclosures show precisely how large that dependence remains.
OpenAI added to that pressure this week, saying its new in-house Jalapeno processor had outperformed Nvidia's current lineup in testing, though the comparison excluded Nvidia's newer Vera Rubin chips.
Chief Executive Jensen Huang's commentary on demand into 2027 therefore carries more weight than any single figure. The question has grown sharper since July, when markets fell on doubts about whether vast AI investments will ever generate proportionate returns.
Nvidia's answer has been to help finance the buildout itself. This month alone it assembled a $500bn (€428bn) capital pool with six Wall Street asset managers for data centre projects, and separately committed up to $105bn (€90bn) to back an OpenAI data centre in Pike County, Ohio, with an initial capacity of 4.25 gigawatts and an option for a further 3.75.
The road ahead
Washington barred sales of the China-specific H20 chip in April 2025, reversed course, and Nvidia has since received approval to ship the more capable H200 chip to vetted Chinese customers.
The company confirmed on Wednesday that it had sold a small number of H200s to Chinese customers during the quarter — its first AI chip sales to China since roughly $60 million (€51m) worth of H20s shipped there in early 2025.
The H200 sales made up less than 1% of data centre revenue, and Nvidia said it has not been able to sell the full amount permitted under its US licence, owing to objections from authorities in Beijing.
It also took a $400 million (€342m) charge over the past six months for excess H200 inventory amid weaker demand. Total China sales, including gaming and other non-AI hardware, came to $7.88 billion (€6.75bn), nearly double a year earlier.
Nvidia said it continues to project zero revenue from China for its data centre and AI chip business going forward. China sales could resurface in talks when Chinese leader Xi Jinping visits Washington next month.
The current growth is being driven by its Blackwell chips, the generation of processors powering most AI data centres today. Their successor, known as Vera Rubin, is expected to begin shipping in the second half of the year.
Nvidia has a tradition of naming its chip architectures after scientists and past generations include Ampere, named after physicist André-Marie Ampère; Hopper, named after computer scientist Grace Hopper; and the current Blackwell chip, named after mathematician David Blackwell.
Vera Rubin continues that pattern. She was an American astronomer whose observations of how galaxies rotate provided some of the strongest early evidence for the existence of dark matter, the invisible mass thought to make up much of the universe. She died in 2016 and is widely seen as someone who was overlooked for a Nobel Prize during her lifetime.
Vera Rubin, is now in full production, Huang said. "The AI infrastructure build-out is at full steam," he said. "Vera Rubin, now in full production, was built to power exactly this moment."
A week stacked with catalysts
Wednesday's data offered no relief on inflation.
The personal consumption expenditures index, the Federal Reserve's preferred gauge, rose 0.2% in July against expectations of 0.1%, leaving the annual rate at 3.7% rather than easing to the 3.6% forecast. Core prices held at 3.3% over the year, above the Fed's 2% target for a 65th consecutive month.
The Federal Open Market Committee held rates at 3.50% to 3.75% in July, with three regional Fed presidents dissenting in favour of a quarter-point increase.
Markets currently put the probability of a September hike at around 40%.
Attention now shifts to Jackson Hole, where Fed Chair Kevin Warsh delivers his keynote on Friday morning, his first since taking office in May, 19 days before the next rate decision. The ECB's Isabel Schnabel joins a panel the same afternoon.
US stock markets drifted through a quiet session on Wednesday after data showed inflation last month was a touch higher than economists had expected.
The S&P 500 edged down less than 0.1% and remains near the all-time high it set earlier this month. The Dow Jones Industrial Average dipped 0.2% and the Nasdaq composite slipped 0.1%.
Treasury yields ticked higher after the inflation update, which has traders still largely betting the Federal Reserve will raise the federal funds rate before the end of this year. Oil prices fell after another volatile session.
