NVIDIA Corporation NVDA used the fiscal second-quarter 2027 earnings call to make one point clear: demand is running ahead of what its supply chain can support.
Executive vice president and CFO Colette Kress paired a roughly 70% fiscal 2028 revenue-growth outlook with warnings on supply limits and memory costs, while outlining a broader AI infrastructure strategy.
NVDA Supply Constraint Defines Fiscal 2028
Revenues of $96.22 billion topped the Zacks Consensus Estimate of $91.80 billion. Non-GAAP earnings of $2.22 per share beat the Zacks Consensus Estimate of $2.09. Revenues rose 106% year over year.
Kress said NVIDIA expects fiscal 2028 revenues to grow about 70%, even as customer forecasts point to demand roughly doubling. She called the outlook supply constrained.
A Morgan Stanley analyst pressed on that gap. Founder and CEO Jensen Huang said greater visibility into infrastructure and component needs supports the 70% outlook, but demand remains higher.
NVIDIA Resets Margin Expectations
Kress guided fiscal third-quarter revenues to $108 billion, plus or minus 2%, with sequential growth led primarily by ACIE. The outlook does not include any China Data Center compute revenues.
Kress said GAAP and non-GAAP gross margins should be 74%, plus or minus 50 basis points, then bottom at 71% to 72% in the fiscal fourth quarter before settling at 72% to 73% in fiscal 2028.
She attributed the reset to memory pricing above prior expectations and said pricing actions take effect in the fiscal first quarter while NVIDIA works with memory suppliers to expand capacity.
NVDA Expands the AI Factory Stack
Data Center revenues reached $89 billion, up 18% sequentially and 117% year over year. Kress said hyperscale revenues rose 13% sequentially to $49 billion, while ACIE increased 25% to $40 billion.
She also stated that NVIDIA's revenue opportunity per gigawatt has expanded from about $18 billion with Hopper to $25 billion with Blackwell and $40 billion with Vera Rubin. Management expects Vera Rubin to mark NVIDIA's fastest product ramp.
Huang told a Cantor Fitzgerald analyst that NVIDIA's system spans data preparation, training, post-training and agentic inference. He said most data centers will center on Vera Rubin and NVLink 72.
NVIDIA Builds Beyond Hyperscalers
Kress said ACIE, spanning NeoClouds, sovereign customers and enterprises, will represent roughly half of Data Center. NeoCloud partners are expected to exit the year with 8 gigawatts of installed capacity.
Kress described a revenue-sharing structure that combines take-or-pay commitments with a share of NeoCloud rental revenues above a floor. She said it could add billions in medium to long-term revenues.
Kress said NVIDIA has invested nearly $50 billion in frontier AI labs and partnered with six capital providers targeting more than $500 billion of third-party capital for AI infrastructure.
NVDA Q&A Puts Financing and Custom Chips in Focus
A BofA Securities analyst asked how NVIDIA balances ecosystem investments with frontier labs developing custom chips. Huang informed that NVIDIA spans the full AI life cycle and multiple clouds, and expects those labs to remain customers.
A Bernstein analyst asked about unconstrained growth. Huang characterized demand as significantly above the 70% supply-backed outlook, citing growth in both hyperscale and ACIE and higher revenue opportunity per gigawatt.
A UBS Investment Bank analyst asked about open models. Huang said both open and closed models are expanding usage and NVIDIA benefits from supporting both across its CUDA ecosystem.
NVIDIA Keeps Focus on Capacity
Huang emphasized securing infrastructure and supply well ahead of deployment. He said the entire supply chain remains challenged and needs continued capacity gains.
Kress framed the near-term trade-off as strong growth against tighter component economics, with memory inflation pressuring margins until pricing actions take effect.
NVDA Rank and Style Scores
NVDA carries a Zacks Rank #2 (Buy). The stock’s Growth Score of A and VGM Score of B are in the framework's preferred A/B range, while its Value Score of D and Momentum Score of C reflect less favorable characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The combination of a Zacks Rank #2 and VGM Score of B fits the framework's preferred pairing of top Zacks Ranks with A or B Style Scores. The Zacks Rank can change as earnings estimates are revised after the just-reported results.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
