NVIDIA Posts $96.2 Billion Quarter and Still Guides Higher With Zero China Data Center Compute Revenue

NVIDIA has put a falsifiable test directly into its next-quarter forecast: even while assuming zero Data Center compute revenue from China, revenue should reach $108.0 billion, plus or minus 2%. If fiscal 2027 third-quarter revenue falls below the $105.84 billion lower bound, or if meeting the range requires China revenue after all, the strength of non-China AI computing demand presented in the August 26, 2026 release will have been overstated. The next earnings report can test that proposition directly; a share-price move cannot substitute for customer orders.

For the fiscal 2027 second quarter ended July 26, 2026, NVIDIA reported $96.2 billion in revenue, up 18% sequentially and 106% from a year earlier. Data Center supplied $89.0 billion, a 117% year-over-year increase and roughly 92% of total revenue. The release did not separate how much of the increase came from training, inference, or networking. GAAP gross margin was 75.0%, while diluted GAAP earnings were $2.46 per share. Revenue more than doubled while gross margin rose from 72.4% a year earlier, so this quarter’s expansion did not require a visible sacrifice in company-wide gross margin.

The company set the midpoint of its third-quarter revenue outlook at $108.0 billion, about 12% above the reported second-quarter result. Its gross-margin forecast is 74.0%, plus or minus 50 basis points, below the latest 75.0%. Those targets place two operating demands side by side. NVIDIA must deliver more Blackwell systems and Vera Rubin, which the company says is now in full production, while keeping gross margin between 73.5% and 74.5% during a product transition and supply expansion. The release gives financial targets but no unit shipments or average system prices, so outside readers cannot yet determine whether the projected increase is mainly volume or product mix.

Capital returns show how much cash the supplier is already generating. NVIDIA returned about $26.0 billion through share repurchases and cash dividends during the quarter, and still had approximately $99.0 billion left under its repurchase authorization at quarter-end. Those figures do not establish that end customers are earning proportionate profits from AI services. They establish that the chip and systems supplier produced substantial earnings and cash in this reporting period. If customer capital expenditure keeps rising without a comparable improvement in AI revenue, order pressure could emerge later than the supply expansion recorded by NVIDIA.

Associated Press reported that NVIDIA shares rose 8.9% after the results and said the company’s next-quarter revenue forecast exceeded analysts’ estimates. That reaction shows the published figures cleared the market’s prior threshold, but it does not show how much of the $108.0 billion forecast is covered by non-cancellable orders. In the same report, AP noted that Salesforce raised its full-year forecast while citing demand for AI and data products. This offers one piece of downstream evidence that customers are paying for AI-related software, although one software company’s quarter cannot represent the return on the industry’s entire data-center investment.

Three disclosed outcomes can be measured over the next three to six months: whether fiscal 2027 third-quarter revenue lands inside the forecast range, whether gross margin stays above the 73.5% floor, and whether the company reaches its target while continuing to exclude China Data Center compute revenue. These measures will reveal sooner than a one-day 8.9% share-price increase whether NVIDIA’s supply expansion is still being absorbed by deliveries and non-China demand.

Sources:

• NVIDIA: NVIDIA Announces Financial Results for Second Quarter Fiscal 2027
• Associated Press: Tech stocks lead Wall Street after Nvidia, Salesforce and others say AI is creating big growth