NVIDIA
NVDA · NASDAQSemiconductors · AI Accelerators and Data Center
Since the Report + 10.8%
Close on Report DayAug 26
$209.66▼ 1.2%Report-Day Move
- Market Cap(Today)
- ≈ $5.62 T
- 1Y Return(At Report)
- + 17%
- P/E($7.01 · Trailing 12M)
- 33.1
- Net Margin(Trailing 12M)
- 63.7%
NVIDIA reported $96.22 billion in revenue for its fiscal second quarter, more than doubling year over year, with the data center platform alone reaching $89.0 billion. Third-quarter guidance of $108.0 billion came in 3.8% above the market estimate. The stock still fell 1.19% in after-hours trading, which would make this the fifth decline after the fifth straight quarter of beating expectations. Two real caveats sit inside the numbers: the gross margin outlook was cut from 75.0% to 74.0%, and free cash flow fell from $48.6 billion to $21.3 billion while revenue doubled.
Revenue (Q2)
$96.22B
▲ 106% YoY · 2.8% Above Estimate
Data Center Revenue
$89.0B
▲ 117% YoY · 3.7% Above Estimate
Adjusted EPS
$2.22
Estimate $2.13 · Beat by 4.3%
Free Cash Flow
$21.3B
Prior Quarter $48.6B · ▼ 56%
Q3 Revenue Guidance
$108.0B
± 2% · 3.8% Above Estimate
Stock Reaction
−1.19%
After Hours · $207.16
Quarterly Revenue ($ Billion)
46.74
57.01
68.13
81.62
96.22
105.8–110.2
- Q2 FY26
- Q3 FY26
- Q4 FY26
- Q1 FY27
- Q2 FY27
- Q3 FY27
- Revenue Growth
- ▲ 106%Sequential ▲ 17.9%
- Data Center Share
- 92.5%$89.0B · ▲ 117% YoY
- Revenue Converted to Cash
- 22.2%Prior Quarter 59.5% · ▼ 37.3 Pts
Q3 FY27 Company Guidance
- Revenue105.8 – 110.2 B $
Midpoint 108.0 · Estimate 104.03.8% Above Estimate ▲
- Gross Margin (Adjusted)73.5% – 74.5%
75.0% in Q2 · Down From a Record1.0 Point Lower ▼
- Operating Expenses (Adjusted)9 B $
$8.23B in Q2▲ 9.3% Sequentially
- China Data Center Revenue0 B $
Second Quarter in a RowAssumed Zero
- Tax Rate16% – 18%
GAAP and AdjustedUnchanged
The blue band is the company's low–high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. Axis is ±6.8% around the midpoint.
- Inventories
- $31.6BPrior Quarter $25.8B
- Returned to Shareholders
- $26.0BAuthorization Left $99.0B
- Quarterly Dividend
- $0.25Payable October 1, 2026
“AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue. 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.”
- Revenue doubled in a year
- Vera Rubin in full production
- Demand spread beyond one customer
Summary
For the fiscal second quarter ended July 26, 2026, NVIDIA reported revenue of $96.22 billion, up 106% year over year and 17.9% sequentially, meaning the company doubled its revenue in a single year. The data center platform grew 117% to $89.0 billion, made up 92.5% of total revenue and beat the $85.8 billion market estimate. Edge computing rose 27% to $7.2 billion. Adjusted earnings came in at $2.22 a share, 4.3% above the $2.13 estimate. Adjusted gross margin held flat at 75.0% versus the prior quarter. The company returned $26.0 billion through buybacks and dividends during the quarter, has $99.0 billion of repurchase authorization still unused, and will pay a $0.25 quarterly dividend on October 1.
Even though every line beat expectations and third-quarter guidance came in above the estimate as well, the stock fell to $207.16 in after-hours trading, down 1.19%. It had already closed the regular session down 1.59% at $209.66, arriving at the print on a seven-session losing streak. The reaction is no longer an exception but a pattern: the stock has fallen the day after each of the last four reports, by 1.8%, 5.5%, 3.2% and 0.8%. Two lines caught investors this time. The first is the 74.0% gross margin guided for the third quarter, a full point below the 75.0% delivered here, and the reason is memory cost. The second is cash: revenue doubled while cash from operations fell from $50.3 billion to $24.1 billion.
We score the quarter 84 out of 100. This grades the earnings report itself, not the stock. Revenue, earnings, data center and guidance all beat, and that growth comes off an $81.6 billion base, which is not an easy comparison. What pulls the score from 88 to 84 is two concrete items: the sharp drop in cash generation and the reduced margin outlook. Both have the same cause. NVIDIA no longer sells chips, it sells racks, and it buys the memory inside a rack months before it collects the revenue. Inventories rose from $25.8 billion to $31.6 billion in a single quarter. On valuation, the stock trades at roughly 30 times the last twelve months of earnings; the average analyst target is $305.79.
Full Review
ClaudeRevenue Doubled in a Year; Scale Is Now the Story
Quarterly revenue of $96.22 billion is more than double the $46.74 billion of a year ago. Growth of 106% at this size is not an ordinary outcome: NVIDIA now books more revenue in one quarter than it did in an entire fiscal year three years ago. The data center platform grew 117% to $89.0 billion and accounted for 92.5% of the total; edge computing grew 27% to $7.2 billion but still represents only 7.5%. The company is effectively a single-line business now: whatever the data center does, NVIDIA does. The data center figure also beat the $85.8 billion market estimate by $3.2 billion, and the place where the estimate was beaten is the place where the story is.
GAAP Earnings Ran Higher on a $7.77 Billion Equity Gain
This is the most easily misread line of the quarter. GAAP earnings were $2.46 a share against adjusted earnings of $2.22, so the GAAP number is the higher one, which is not the usual arrangement at NVIDIA. The gap comes from a $7.77 billion valuation gain on equity securities the company holds. That money never entered the bank: the shares in NVIDIA's portfolio rose in price, and accounting rules put the change straight into net income. Because the rule is symmetric, the same line works in reverse if those holdings fall. The point is simple: if you want to see what the company earned selling chips, the number to read is $2.22, not $2.46. Market estimates are built on the adjusted figure, which is why the surprise is 4.3%.
Revenue Doubled and Free Cash Flow More Than Halved
Cash from operations fell to $24.1 billion from $50.3 billion in the prior quarter. With capital expenditure of $2.68 billion, free cash flow came to $21.3 billion, against $48.6 billion three months earlier. As a ratio the gap is starker: last quarter 59.5% of revenue converted to cash, this quarter 22.2% did. Profit did not fall; it rose. What changed is where the money sits. Inventories climbed $5.8 billion in a quarter, from $25.8 billion to $31.6 billion. The cause is a change in what NVIDIA sells: not individual chips but rack-scale systems containing memory, networking hardware and cooling. Every component in that rack is purchased months before the system ships and the invoice is collected, and the cash stays locked in inventory throughout. Growth itself consumes cash. This is not a bad quarter; it is a different business model.
The Margin Outlook Fell a Point on Memory Costs
The company guided third-quarter adjusted gross margin to 74.0%, plus or minus 50 basis points. That is a full point below the 75.0% delivered this quarter, and one of the first times NVIDIA has put an explicit downward marker in its own outlook. The cause sits one link up the supply chain: demand absorbed by AI servers has pushed HBM and DRAM prices higher. NVIDIA created that shortage, but when it sells a rack it is also the party buying the memory. The scale matters here: 75.0% is the highest gross margin the company has ever recorded, 2.6 points above the 72.5% of a year ago. The 74.0% guide is therefore a step down from a record, not a slide into weakness. A single point sounds small; on a $108 billion quarter it is roughly $1.1 billion of gross profit. We saw the same mechanism this summer as a compressing margin at Cisco despite record revenue, and as a record margin at the memory makers. The two ends of the chain are two sides of one number.
Third-Quarter Guidance Is $108 Billion, With No China In It
Guided revenue is $108.0 billion, plus or minus 2%, or a range of $105.8 billion to $110.2 billion. The market estimate stood near $104 billion, putting the midpoint 3.8% above it. The outlook contains no data center revenue from China at all, the second consecutive quarter the company has held that assumption at zero. The choice cuts both ways: the world's second-largest market remains closed, and every dollar that eventually comes from it lands on top of guidance as upside. Adjusted operating expenses are guided to $9.0 billion, up from the $8.23 billion delivered this quarter. The tax rate remains 16% to 18%.
Vera Rubin Is in Full Production; AWS Booked 2 Million More
The most concrete new item in the release is not a forecast but a status: the Vera Rubin platform has entered full production, with racks running at CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius. Last quarter that transition was still on the calendar; now it is inside the revenue. A second announcement the same day shows how far forward demand is booked: AWS said it will deploy 2 million more Blackwell Ultra, Rubin and Rubin Ultra GPUs across 2027 and 2028. AWS had already pledged more than 1 million chips at GTC in March, and by NVIDIA's own account demand has exceeded that plan. The package also includes 100,000 GPUs set aside for federal and national-security workloads. On the call, Jensen Huang said demand has moved beyond a single lab to multiple frontier labs, startups and an open-model ecosystem, a direct answer to the customer-concentration question investors have asked for years. The answer is still the company's assertion, not an audited breakdown.
Strengths
6- Revenue reached $96.22 billion and doubled in a year, up 106% from a year ago and 17.9% sequentially.
- Data center revenue grew 117% to $89.0 billion, beating the $85.8 billion market estimate by $3.2 billion.
- Adjusted earnings of $2.22 a share beat the estimate by 4.3%; adjusted gross margin held flat at 75.0%.
- Third-quarter revenue guidance of $108 billion came in 3.8% above the market estimate.
- AWS committed the same day to 2 million more GPUs for 2027-2028, having already exceeded its 1 million pledge from March.
- The company returned $26.0 billion through buybacks and dividends, with $99.0 billion of authorization still unused.
Risks
6- Free cash flow fell from $48.6 billion to $21.3 billion; the share of revenue converting to cash dropped from 59.5% to 22.2%.
- Third-quarter gross margin guidance was cut to 74.0%, a full point below the 75.0% delivered this quarter, on memory costs.
- Inventories rose from $25.8 billion to $31.6 billion in one quarter; write-downs have occurred once before during an architecture transition.
- $7.77 billion of GAAP earnings came from revaluing equity holdings, a line that never reached the bank and reverses if markets turn.
- Most data center revenue comes from a handful of hyperscale customers, all developing their own accelerators; the company says demand has broadened but publishes no customer breakdown to show it.
- The stock has fallen the day after each of the last four reports; the bar is high enough that beating on every line can still send it down.
What to Watch
6- November 2026 - fiscal third-quarter results: the test of the $108 billion outlook, the 74.0% margin and the no-China scenario.
- November 2026 - the first full quarter with Vera Rubin in full production; yield and logistics problems are routine in new architecture ramps.
- 2027-2028 - the deployment schedule for the 2 million GPUs AWS has committed to, and how many quarters it spans.
- October 1, 2026 - payment of the $0.25 quarterly dividend.
- Late 2026 - whether any revenue is recognized on shipments to China; guidance assumes zero, so this counts as upside.
- February 2027 - fiscal fourth-quarter and full-year 2027 results: the first real accounting of the $1 trillion Blackwell and Rubin order target.
Upcoming Earnings
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