Nvidia posts another blowout quarter as data center revenue keeps surging

Nvidia reported another quarter of explosive growth, with fiscal second-quarter revenue coming in at $96.2 billion, more than double what the chipmaker posted a year earlier and roughly 5.7% above the midpoint of its own guidance, as demand for the processors that power artificial intelligence systems continues to outpace supply.

The numbers behind the quarter

Data center revenue, the company's largest and fastest-growing segment, reached $89.0 billion, up 117% from a year earlier and about 92% of total revenue, driven largely by the ramp of Nvidia's Blackwell Ultra chips. Within that segment, revenue from hyperscale cloud providers more than doubled year over year, while revenue from AI-native companies, enterprises and sovereign customers climbed 138%. Gross margin held at 75.0% on both a GAAP and adjusted basis, and the company earned $2.46 per diluted share on a GAAP basis, or $2.22 on an adjusted basis. "AI has reached its inflection point," said founder and chief executive Jensen Huang. "It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue. And demand is accelerating."

The company returned $26 billion to shareholders during the quarter through buybacks and dividends, and separately announced a partnership under which Amazon Web Services will purchase two million Nvidia GPUs alongside the company's new Vera CPU. Chief financial officer Colette Kress said capital spending among the industry's five largest hyperscale cloud providers is projected to climb to roughly $1.3 trillion next year, up from about $800 billion in 2026, underscoring how much runway executives believe remains in the AI buildout.

Margin pressure ahead

Kress also flagged that gross margin is expected to decline and bottom out in the fiscal fourth quarter, in a range of 71% to 72%, largely because of rising memory chip costs tied to the broader AI hardware buildout. "We want to be direct about this, rather than let it linger as an open question," Kress said, adding that memory scarcity is being driven in large part by the AI buildout itself rather than by any issue specific to Nvidia.

What comes next

For the current quarter, Nvidia guided to revenue of $108.0 billion, plus or minus 2%, a figure that assumes no data center compute revenue from China, where export restrictions have curtailed the company's ability to sell its most advanced chips; shipments of Nvidia's Hopper-generation products to China made up less than 1% of data center revenue during the quarter just reported. Huang has forecast that revenue will grow roughly 70% in the coming fiscal year, a figure well above what Wall Street analysts had penciled in. Looking further out, the company said it plans to begin shipping its next-generation Vera Rubin platform in the fiscal third quarter, with a larger production ramp expected through the fourth quarter and into early next year, as it pushes further into new markets including autonomous vehicles and robotics.