Nvidia lifts outlook as data center sales surge

Nvidia (NVDA) reported fiscal second-quarter 2027 revenue of $96.2 billion, delivering one of its largest quarterly performances to date. Adjusted earnings per share came in at $2.22, while both GAAP and non-GAAP gross margins were reported at 75%. The figures underline continued strength in the company’s core businesses during the quarter.

Data Center operations remained the primary growth engine, generating $89.0 billion in revenue for the quarter. This represented about 117% growth year over year, highlighting the scale of demand for Nvidia’s (NVDA) compute and AI-focused products. The Data Center segment’s performance accounted for the vast majority of overall company revenue in the period.

For fiscal third quarter, Nvidia guided revenue of $108 billion. Management specified that this outlook assumes no Data Center compute revenue from China. The explicit exclusion underscores that the company’s near-term expectations are based on demand and supply conditions outside that major market.

The revenue guide continues the company’s pattern of projecting robust demand for its AI and data-center offerings. By clarifying the absence of China compute contributions in the forecast, Nvidia provided a clearer view of expected performance from other regions and customers.

Looking beyond the upcoming quarter, Nvidia’s management outlined expectations for fiscal 2028. Executives described overall revenue growth for that year as “supply-constrained” at about 70% year over year. They stated that the company expects to have sufficient supply to support this 70% growth rate.

The emphasis on supply constraints suggests that demand for Nvidia’s products is anticipated to exceed what can be delivered within existing capacity. Management’s comments position supply availability, rather than customer interest, as the key limiting factor for scaling revenue in that timeframe.

The immediate market response to the earnings release was mixed. Nvidia’s shares were reported to have dipped by around 1% to 2% after the initial announcement. As the analyst conference call progressed and management detailed its outlook, the stock reversed course and rose roughly 4%.

Broader equity markets also reacted to the company’s commentary. Futures linked to the tech-focused Nasdaq 100 Index (NDX) gained about 1% in early trading after Nvidia shared its bullish sales outlook. The move in futures reflected investor expectations that strong AI-related demand at Nvidia could support sentiment across the technology sector.