Nvidia reported fiscal second-quarter revenue of $96.2 billion on August 27, 2026, more than doubling year-over-year and surpassing Wall Street expectations. Despite strong performance and a higher fiscal-year forecast, shares slipped as management pointed to rising memory costs and capacity supply constraints ahead.
Nvidia Reports Second-Quarter Revenue of $96.2 Billion
Nvidia Corporation reported fiscal second-quarter revenue of $96.2 billion, more than doubling year-over-year and beating the $92.2 billion projected by Wall Street. Net income for the period more than doubled to $53.95 billion, translating to adjusted diluted earnings of $2.22 per share compared to the $2.10 expected by analysts according to LSEG data. The chipmaker’s data center revenue surged 117% to $89 billion, comfortably exceeding estimates near $85 billion.
Chief Executive Officer Jensen Huang highlighted the scale of the ongoing market expansion during the earnings report. AI has reached its inflection point… compute is revenue, and demand is accelerating,
Huang said as reported by the financial outlets. The results underscored robust demand translating into profitability, keeping the company firmly at the center of the artificial intelligence boom nearly four years after the initial launch of conversational AI tools.
Piper Sandler Initiates Coverage With an Overweight Rating and $300 Price Target
Following the financial disclosures, Piper Sandler analyst David O’Connor initiated coverage on Nvidia with an Overweight rating and a price target of $300, implying roughly 34% upside. The firm positioned the semiconductor giant as an outright compute leader controlling an estimated 80% of the market by value and 50% by units, maintaining its competitive edge through an annual cadence of next-generation products.
According to the firm’s forecasting notes, Nvidia trades near 14 times estimated fiscal 2028 earnings, which places it among the cheapest valuations in its AI universe when paired with an expected 47% compound annual growth rate through fiscal 2030. Analyst David O’Connor noting that scarcity continues to provide demand visibility.
Margin Pressures, Rising Memory Costs, and Supply Commitments
Despite the headline beats and an aggressive third-quarter revenue guidance of $108 billion, Nvidia shares slipped 1.8% in after-hours trading. Investors reacted to management’s forecast that gross margins will bottom at 71-72% by the fourth fiscal quarter, down from the recent 75% level, driven largely by soaring production and component expenses.
Chief Financial Officer Colette Kress explained to analysts on the conference call that memory scarcity today is being driven in large part by the AI buildout itself,
meaning that customer demand is actively inflating input costs. Forward financial commitments linked to components like the Vera Rubin platform more than doubled to $279 billion from $119 billion in the previous quarter, magnifying the financial exposure if industry demand growth moderates before those obligations are fulfilled.
Huang contrasted last year’s customer concentration with the current landscape, noting that multiple frontier labs
and a thriving open-model ecosystem
are now scaling simultaneously to diversify the company’s demand base. Alongside these supply chain expansions, the company returned substantial capital to shareholders, executing $26 billion in buybacks and dividends during the quarter under an $80 billion authorization.
Next Catalysts and Execution Milestones to Watch
Execution remains the central test for Nvidia as competitors attempt to reduce their reliance on proprietary graphical processing units. Major technology firms continue to balance external procurement with internal custom silicon efforts, such as Meta’s planned deployment of its in-house Iris AI chip. At the same time, Nvidia’s next-generation Vera Rubin platform is now in full production, anchoring management’s projection that customer forecasts point toward continued expansion into the next fiscal year.
