Nvidia posted better-than-expected fiscal second-quarter results after Wednesday’s market close, beating Wall Street forecasts on both revenue and earnings.
The company generated $96.2 billion in quarterly revenue, ahead of the $92.27 billion consensus estimate. Its data-center business delivered $89 billion in revenue, surpassing analysts’ projection of $85.4 billion. Adjusted earnings per share reached $2.22, compared with expectations of $2.09.
Nvidia shares climbed roughly 4% in after-hours trading following the announcement. Bitcoin, meanwhile, continued to trade in a narrow range above $78,000.
Nvidia CEO Jensen Huang said AI is entering a major turning point, arguing that demand for computing power is rapidly accelerating as it increasingly translates into revenue.
The company expects fiscal third-quarter revenue to reach $108 billion, comfortably above Wall Street’s $103.9 billion forecast. Reaching more than $100 billion in quarterly sales would put Nvidia among a small group of S&P 500 companies that have achieved that level.
Still, Nvidia projected a gross margin of 74% for the coming quarter, down from 75% in the second quarter. The lower margin forecast appeared to temper the stock’s initial reaction to the earnings report.
Investing.com senior analyst Thomas Monteiro said Nvidia’s latest results suggest profitability could face increasing pressure as expenses related to memory, financing and infrastructure continue to rise.
Monteiro noted that the 74% margin forecast for October would mark the first sequential decline in the company’s current cycle. Rising memory prices could also make it more difficult for Nvidia to maintain margins in the mid-70% range.
The analyst also suggested Nvidia may have limited ability to transfer all of those higher costs to customers because major technology companies are simultaneously dealing with increased capital spending and borrowing expenses.
Monteiro described the quarter as exceptionally strong overall but said investors may need to reassess Nvidia’s medium-term growth trajectory.
He added that the broader AI opportunity remains intact, with the bigger question being how effectively Nvidia can turn that growth into sustained margins and cash generation.
During the post-earnings call, Huang highlighted supply and cost challenges that could influence the company’s profitability.
He said Nvidia is working with memory manufacturers and securing additional resources for electricity, land and data-center infrastructure as demand continues to exceed available capacity.
Huang also pointed to a price increase planned for the first quarter. He argued that Nvidia’s products can generate significant returns for customers, potentially allowing the company to pass some higher costs through to buyers.
