TLDR
- Nvidia reported Q2 revenue of $96.2 billion, up 106% year over year, beating estimates of $92.27 billion
- Adjusted EPS of $2.22 beat the consensus of $2.09; data center revenue jumped 117% to $89 billion
- Q3 guidance of ~$108 billion and fiscal 2028 growth forecast of ~70% topped analyst expectations of ~45%
- Nvidia’s edge is expanding beyond GPUs into data orchestration hardware like the Vera CPU and Vera Rubin architecture
- Multiple analysts raised price targets post-earnings; consensus sits at “Moderate Buy” with an average target of $322.61
Nvidia posted blowout Q2 earnings on August 26, with revenue of $96.22 billion against a Wall Street estimate of $92.27 billion. The stock opened at $217.55 on Friday.
Data center revenue led the way, climbing 117% year over year to $89 billion. Adjusted EPS came in at $2.22, beating the $2.09 consensus by $0.13.
Revenue was up 105.9% compared to the same quarter last year. Return on equity hit 96.04%, with a net margin of 63.66%.
Management guided Q3 revenue to roughly $108 billion. The company also said fiscal 2028 sales could grow around 70%, well above the ~45% analysts had modeled.
Several analysts responded by lifting their price targets, including Wedbush, Truist, RBC, and JPMorgan. The average analyst price target now sits at $322.61, with 48 buy ratings and four holds.
Nvidia’s Expanding Hardware Story
The bigger narrative coming out of earnings is that Nvidia’s advantage is no longer just about GPUs. The company’s Vera Rubin architecture combines the Rubin GPU with the Vera CPU, a Groq 3 LPX inference accelerator, and dedicated storage and networking racks.
The Vera CPU is focused on data orchestration within large-scale data centers. Nvidia’s VP of storage technology, Jason Hardy, said the chip delivered “upwards of 3x improvement” in certain operations, allowing flash storage to run at full capacity without bottlenecking.
As data centers scale up, getting data to the GPU at the right time has become a real challenge. Nvidia is positioning its full system stack as the answer, not just individual chips.
Competition and Risk Factors
Nvidia is not without headwinds. Gross margins are expected to compress to around 72%-73% as memory, packaging, and infrastructure costs rise.
Supply constraints remain a factor, potentially limiting how fast strong demand converts into revenue. The company also excluded China data center compute revenue from its guidance, flagging ongoing export control risks.
There are also reports that Nvidia paused some revenue-sharing arrangements with AI cloud providers, raising questions about customer financing. Investors took some profits after the post-earnings rally, with NVDA sliding alongside AMD and Intel.
On the acquisition front, Nvidia is reportedly pursuing Hugging Face in a deal valued at roughly $12.9 billion, though terms are not finalized.
Institutional investors own 65.27% of NVDA stock. Insiders have sold $410 million worth of stock over the past 90 days. The company announced an $80 billion share buyback program in May and declared a quarterly dividend of $0.25 per share, payable October 1.
The 52-week range sits between $164.07 and $236.54, with a current market cap of $5.24 trillion.
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