Nvidia's shares, currently the highest valued publicly traded company in the world by market capitalization, at about 5.5 trillion dollars (4.7 trillion euros), rose by up to 8.4% on Wall Street. The boost came after the advanced chip manufacturer for AI exceeded market expectations with its second-quarter earnings and anticipated a strong increase "of approximately 70%" in its revenues for the next fiscal year, thus prolonging the intense demand linked to artificial intelligence.
The rebound of Nvidia's shares, which on Thursday reached an intraday high of 227.31 dollars, places the company less than 4% from its historical record, registered on May 14, when the shares of the multinational led by Jensen Huang hit an intraday high of 236.54 dollars, with a capitalization that then surpassed 5.7 trillion dollars (4.9 trillion euros).
The market's reaction reflects confidence that the current AI 'boom' will be sustained in the short and medium term. The American semiconductor manufacturer expects a revenue increase "of approximately 70%" in its next fiscal year (2027/2028), even incorporating in its estimates "supply constraints".
In a conference with analysts following the presentation of the results, Colette Kress, executive vice president and chief financial officer of Nvidia, provided an initial estimate that revenues for the next fiscal year "will grow approximately 70% year-on-year," and clarified that, although the company will strive to reduce the gap between supply and demand, "supply will continue to be a bottleneck at least until the end of fiscal year 2028."
"Surprisingly, we are seeing an acceleration of demand even at our scale. Our customers' forecasts indicate that our growth will double next year," Kress noted.
The executive emphasized that "the surge in AI demand is driving the development of infrastructure worldwide," supported by an increasingly broad and diverse opportunity base, which includes large cloud service providers, AI labs, native artificial intelligence companies, large enterprises, and public administrations.
At the same time, he defended that "greater processing capacity generates greater revenues" as new GPUs are added, highlighting that Nvidia's large cloud service customers reported solid results in the quarter, with revenue acceleration and margin improvement. According to their data, the backlog in the cloud sector exceeds 2 trillion dollars (1.7 trillion euros).
Looking ahead to the coming years, it is projected that the capital investment of the five largest providers of large-scale cloud services will approach 800 billion dollars (686.019 billion euros) in 2026 and reach around 1.3 trillion dollars (1.1 trillion euros) in 2027.
For his part, Jensen Huang, founder and CEO of Nvidia, recalled that, although the company "had never made forecasts or projections a year in advance," it now has much greater visibility, both over the supply chain and over demand and distribution.
"Although our demand far exceeds 70%, our supply allows us to meet that percentage with confidence," Huang pointed out, who emphasized that Nvidia will continue to collaborate with its industrial partners to further expand the available capacity.
Regarding the doubts about the evolution of gross margins, in a context of strong price increases of components, the CFO explained that the company is facing extreme pricing conditions in the memory market and admitted that the intensity of the increases "has exceeded our previous expectations and is expected to continue rising next year."
As she added, "the current memory shortage is largely due to the development of AI, and unlike a component that simply increases our costs without any compensatory benefit, the lower memory supply is a symptom of the same increase in demand that drives our own growth."
It doubles profits and revenues in the quarter
Nvidia reported a net profit of 59.688 billion dollars (51.156 billion euros) in its second fiscal quarter, from May to July, which implies a 126% increase in earnings compared to the same period of the previous fiscal year, according to the American manufacturer of advanced microprocessors.
Nvidia's revenue reached in the quarter 96.221 billion dollars (82.467 billion euros), 106% more than a year earlier and 18% above the income achieved in the first three months of its fiscal year.
In detail, the world's most valuable company specified that the data center business generated between May and July 89.000 billion dollars (76.278 billion euros), 117% more. For its part, the computing division contributed 7.200 billion dollars (6.170 billion euros), which represents an increase of 27%.
In the entirety of the first half of the fiscal year, the company led by Jensen Huang obtained a net profit of 118.110 billion dollars (101.227 billion euros), 161.3% higher than a year earlier, while revenues rose to 177.837 billion dollars (152.417 billion euros), 95.8% more.
Thus, Nvidia has achieved in the first six months of its current fiscal year a net profit practically equivalent to that of the entire previous fiscal year, when the company earned 120.067 billion dollars (102.905 billion euros).
"AI has reached a turning point," said Jensen Huang. "It is doing useful work. Its components are productive and profitable. Now, computing generates revenue," he added.
The executive also highlighted that demand "is accelerating" in the midst of a "golden age" for new AI labs and startups, with multiple cutting-edge research centers growing in parallel, a thriving ecosystem of open models, and physical AI starting to deploy, with strong dynamism both in the United States and in other markets.
Looking ahead to the third quarter of its fiscal year, Nvidia expects revenues to be around 108.000 billion dollars (92.563 billion euros), with a possible variation of 2%, while gross margins will be around 74%, with a margin of 50 basis points up or down. In addition, the multinational estimates that operating expenses will be approximately 9.200 billion (7.885 billion euros).