Nvidia earnings: Chipmaker forecasts Q3 revenue at $108 billion, above analysts' estimates as Q2 profit, revenue double YoY

Chipmaker Nvidia released its earnings on Wednesday in which it forecast third quarter revenue at $108 billion, plus or minus 2%, well above Wall Street analysts’ average estimate of $104.19 billion, signaling that major technology companies continue to spend heavily on its chips to advance their AI ambitions.

Nvidia has estimated that the market opportunity for its AI chips could exceed $1 trillion through 2027, double the $500 billion opportunity it had projected through 2026 for its Blackwell and Rubin chips. It said its outlook did not include any data centre chip sales to China.

The $5 trillion company reported a net income of $59.69 billion, or $2.46 per share, for the May-July quarter, up 125% from $26.42 billion, or $1.08 per share, a year earlier.


Revenue more than doubled year-on-year to $96.22 billion, exceeding analysts’ average estimate of $92.27 billion.

Despite the strong growth in revenue and profit, Nvidia’s operating expenses climbed 55% to $8.41 billion.

"AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue," said Jensen Huang, founder and CEO of NVIDIA. "And demand is accelerating. This time last year, one lab alone was driving the buildout; today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online with strong momentum across the U.S. and around the world. The AI infrastructure buildout is at full steam. Vera Rubin, now in full production, was built to power exactly this moment."

Shares of the world’s most valuable company fell 1.2% in extended trading. As of Tuesday’s close, Nvidia had gained 14.2% this year, while AMD and Intel had more than doubled.

During the second quarter of fiscal 2027, NVIDIA returned approximately $26.0 billion to shareholders in the form of shares repurchased and cash dividends. As of the end of the second quarter, the company had approximately $99.0 billion remaining under its share repurchase authorization.

Nvidia will pay its next quarterly cash dividend of $0.25 per share on October 1, 2026, to all shareholders of record on September 10, 2026.

Nvidia's second-quarter revenue from data centers was $89.0 billion, up 18% from the previous quarter and up 117% from a year ago.

Nvidia’s results are closely watched as a key indicator for the AI market because its chips power many of the world’s leading data centres and advanced AI models.

The results come weeks after Microsoft and Meta, two of Nvidia’s largest customers, reinforced expectations that Big Tech will spend more than $730 billion on AI infrastructure this year, sharply above last year’s $400 billion.

However, a growing portion of planned technology spending is being directed towards internally developed chips aimed at reducing dependence on Nvidia’s expensive and supply-constrained processors.

The company said its planned Operating Expenses for next quarter is expected to be around $9.2 billion while planned capex is $8 billion total.

Scrutiny has also increased over Nvidia’s role in the AI boom’s complex financing ecosystem after the company agreed to guarantee certain deals under a new partnership with six major financial institutions seeking to raise more than $500 billion for AI infrastructure.

As AI adoption expands for automating tasks and responding to queries, Nvidia’s graphics processors are facing increasing competition from central processors and custom chips designed for inference, the process of running AI models.

Intel and AMD are also pursuing the inference market, while several Chinese companies, including Baidu, already make their own chips for these workloads. Nvidia has responded to the growing competition.

In March, Nvidia unveiled a new central processor and AI system based on technology licensed from inference-focused startup Groq in a $17 billion deal, combining Groq’s chips with its upcoming Vera Rubin platform.

Nvidia’s position as the AI market leader received another boost earlier this month when SpaceX CEO Elon Musk said the rocket company would use Nvidia hardware exclusively.

(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)