Nvidia Rallies After Record Quarter and a Bolder Full-Year Forecast

Nvidia shares climbed about 9% in Thursday afternoon trading, on track for one of their steepest one-day advances of the year, after the company reported record quarterly revenue late Wednesday and told investors the growth has further to run. The stock changed hands near $229, up from Wednesday’s close of $209.66. It lifted the Nasdaq more than 1.5%.

$89 billion from data centers

For the fiscal second quarter, which ended July 26, Nvidia reported revenue of $96.2 billion, up 106% from a year earlier and 18% from the prior quarter. The mix told the story. Data center sales did almost all of the work at $89.0 billion, a 117% jump from last year and nearly 93% of the total. A year ago, that segment brought in less than half as much. Adjusted earnings came to $2.22 a share, up 120% and ahead of the $2.10 analysts had modeled. Revenue also cleared the $92.2 billion the Street was looking for.

A forecast of 70% growth

Guidance mattered more than the quarter. Management guided fiscal third-quarter revenue to $108.0 billion, give or take 2%, an 89% increase from a year earlier at the midpoint. Then Chief Financial Officer Colette Kress went further, telling analysts the company expects revenue to grow about 70% in fiscal 2028. That figure ran ahead of what Wall Street had penciled in, and several analysts raised their price targets on the stock Thursday. Chief Executive Jensen Huang put the demand bluntly on the call: “Now, compute is revenue.”

The margin guide ticks lower

One number gave skeptics something to hold. Gross margin reached 75.0% in the quarter, but the company guided next quarter’s figure down to 74.0%, plus or minus half a point. On the earnings call, that step-down was framed as a cost trade-off tied to the newest hardware rather than weaker pricing. Investors treated the revenue path as the louder signal and largely looked past the margin.

Already up 21% in a month

The rally builds on a hot streak. Even before Thursday, Nvidia had gained close to 21% over the past month and nearly 15% over three months. The move carried the stock to within a few percent of its 52-week high of $236.54, at the upper end of a 52-week range that starts down at $86.62. Trading volume ran at 1.7 times the 20-day average by early afternoon. At about $5.5 trillion in market value, Nvidia is large enough that its swings move the major indexes on their own, and Thursday’s jump rippled across other chip and AI-hardware names. The broader tape stayed calm. The S&P 500 rose 0.8% and the VIX eased below 15.

On the calendar

Nvidia’s next scheduled earnings report is set for late November. Others report sooner. Before then, results from other hardware suppliers will test whether the spending Nvidia is counting on is showing up elsewhere in the chain. Dell and Palo Alto Networks both report on Sept. 1. Thursday’s close will also settle whether the early rally holds into the bell.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.