Nvidia Corp. (NASDAQ: NVDA) delivered a fiscal second-quarter beat and third-quarter guidance that came in ahead of estimates on Wednesday afternoon, but the number that really moved shares wasn't in the headline figures. It was something CFO Colette Kress said about a fiscal year that's still a couple of years away.
Revenue for the quarter hit $96.22 billion, up 106% from a year earlier and above the $92.17 billion that analysts polled by LSEG had projected. Adjusted earnings of $2.22 per share also topped the $2.10 estimate. Third-quarter revenue guidance of $108 billion, plus or minus 2%, cleared the $104.2 billion Wall Street had penciled in, and would mark the first time the company has topped $100 billion in quarterly sales.
70% Revenue Growth in FY 2028
The bigger surprise came from Kress, who told analysts on the call that Nvidia expects fiscal 2028 revenue growth of 70%, well above the 44% analysts had been modeling. Customer forecasts, Kress said, "point to our growth doubling next year," though she cautioned that the guidance still reflects supply constraints rather than any softening in demand.
Shares had slipped through the earnings release before turning higher in after-hours trading once Kress delivered that projection.
Capital spending among Nvidia's largest customers is set to climb sharply as well. Kress said capex among the "top five hyperscalers" is expected to rise to $1.3 trillion next year from $800 billion in 2026, underscoring how much of the AI buildout still runs through Nvidia's order book.
Margins Bottom Out in Q4
Margins tell a more complicated story. Nvidia said gross margin will decline before bottoming out in the fourth quarter of fiscal 2027, landing in a range of 71% to 72%, with memory prices cited as a key drag. Kress addressed the pressure head-on rather than sidestep it.
"We want to be direct about this, rather than let it linger as an open question," she said. "Memory scarcity today is being driven in large part by the AI buildout itself."
Nvidia has already leaned on its balance sheet to lock down parts, spending $145 billion in the first quarter alone to secure supply.
Data center revenue, still the core of Nvidia's business, rose 117% year over year to $89 billion, and now accounts for 92% of total sales. Net income climbed 126% to $59.7 billion, ahead of the $51.2 billion analysts had expected.
The numbers cleared every bar Wall Street set. The question now is whether hyperscalers keep spending fast enough, and memory prices ease soon enough, to make Kress's math hold up.
NVDA Stock Price Activity: Nvidia stock was up 3.95% at $217.94 during after-hours trading Wednesday.
