Nvidia posted another quarter of record earnings Wednesday, and its shares gained as a forecast of accelerating growth helped calm rising anxiety throughout the market surrounding the viability of the artificial-intelligence trade and fears about overspending on AI infrastructure.
For the quarter ended in July, Nvidia reported record sales of $96.2 billion, or 4% higher than the $92.3 billion analysts polled by FactSet had expected. Net income of $59.7 billion and earnings per share of $2.46 also beat analyst expectations by wide margins.
Chief Executive Officer Jensen Huang said demand is only accelerating. He also touted the rollout of the company’s latest chip line, Vera Rubin.
“The AI infrastructure build-out is at full steam,” he said. “Vera Rubin, now in full production, was built to power exactly this moment.”
The crucial data-center segment, which includes most of the AI servers for which Nvidia is best-known, produced sales of $89 billion. Analysts had expected $86.3 billion.
Nvidia’s shares gained more than 4% in after-hours trading after Chief Financial Officer Colette Kress, speaking on a call with investors and analysts, said the company expects revenue to grow 70% in 2028.
A flurry of dealmaking activity and product-related news over the past few months has thrust Nvidia—the world’s largest publicly traded company and dominant designer of advanced computer chips—even closer to the center of the AI boom.
The company warned that margins would narrow in the coming months while Nvidia copes with a surge in memory costs. It expects the measure to bottom out in the fiscal fourth quarter — a period that runs through January — at 71% to 72%.
As Nvidia increases its own prices, the range should settle down to 72% to 73% in fiscal 2028, Kress said.
The broader message was that there’s been no letup in demand from customers. After years of runaway growth, some investors had become concerned about a potential bubble. Nvidia’s myriad investment pacts with companies in the AI economy also sparked fears that circular deals will leave the industry on shakier ground.
Kress said Nvidia expects big frontier AI labs like OpenAI “to become the largest technology companies in history.”
These labs face a bottleneck, however, in accessing all the computing power they need to develop products and improve models, and that is why they need Nvidia’s financial help, Kress said.
“We recognize the scale of this support, and we know some will call this circular financing. We see it differently,” she said. “The equity returns on our invested capital will be excellent.”
“The big picture is that we’re going through this platform shift and it affects every computer company,” said Jensen Huang, Nvidia’s chief executive. “These will be some of the most consequential technology companies in history.”
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