Nvidia Earnings Recap: Big Revenue Growth and 'Extreme' Memory Costs

This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now. Have an account? Log in . Updated 2026-08-26T22:21:25.877Z Read in app Nvidia delivered the final word on the AI trade this earnings season — "resetting expectations" as it warned investors the memory shortage was biting into its gross margin. The tech titan delivered second-quarter results on Wednesday that topped Wall Street estimates. The company expects the AI party to continue, projecting $108 billion in revenue for the current quarter, above the $104.57 billion expected by analysts. Nvidia expects its fiscal 2028 revenue to grow around 70% year over year, even as it warned supply is expected to remain bottlenecked. The stock slipped 2% after hours immediately following the results, but rose 4% as the earnings call progressed. The chip maker's all-important data center segment brought in $89.0 billion compared to analysts' estimates of $85.83 billion. That's up 117% year over year. Nvidia's closely watched gross margin was in line with estimates at 75% — but, as some investors feared, the chip-maker expects that to decrease in the coming year. Nvidia warned on its earnings call that memory costs are "extreme" and surpassed even its own expectations, and, as a result, it was "resetting expectations today." For the current quarter, the company expects its gross margin to be 74%, plus or minus 50 basis points, but a bottoming out to 71- 72% in fiscal Q4 before settling at 72-73% in the coming fiscal year as chip price hikes go into effect. The chip-maker's CFO pushed back on criticism of its investment deals with customers. "We recognize the scale of this support, and we know some will call this circular financing," Colette Kress says. "We see it differently." Scroll on for a full play-by-play of Nvidia's earnings call: See more less 2026-08-26T22:06:01.000Z Steven Tweedie Copied! That's a wrap! Nvidia's analyst call concludes, with the stock trading up 4.3% after hours. See you next quarter! 2026-08-26T22:00:24.000Z Ben Shimkus Copied! Can Nvidia sales grow faster than data center capacity? "Is our goal to put as much compute on the plot of land? Is our goal to put more compute into one gigawatt or less?" Nvidia's CEO says. "Obviously, we would like that, you know, the speed of light answer. The perfect answer is actually infinity per gigawatt." "And so, if we could literally get a trillion dollars of compute into one gigawatt and one piece of land power shell, it would be a fantastic outcome," Huang says. "The answer is directionally, in that direction." 2026-08-26T21:57:43.000Z Steven Tweedie Editor Copied! Nvidia execs field final question as stock trades up 4.3% after hours. The final question is about scaling compute and Nvidia's general chip ambitions. 2026-08-26T21:54:04.000Z Ben Shimkus Copied! Huang says AI models will drive even more chip demand AI is already shifting from tools prompted by people to agents that run continuously in the background, Nvidia CEO Jensen Huang says. He's still confident that it will drive Nvidia's massive profits. 2026-08-26T21:53:32.000Z Brent D. Griffiths Copied! Nvidia CEO Jensen Huang isn't worried about open-source AI models Huang says he doesn't see open models as a big risk to the proprietary AI models. "Both closed and open models are going to succeed," he says. "And they're both simultaneously driving our sales." Huang stresses that open models, the leading of which are made by Chinese-based companies, run on Nvidia. There is at least one exception to his argument. Earlier on Wednesday, Z.ai revealed that it was behind the mysterious "Ox-Alpha" model. In announcing the release of GLM-5.3-Flash, Z. ai says it ran the open-weight model on Chinese chips. 2026-08-26T21:50:53.000Z Truman Dickerson Copied! Huang says people just see Nvidia's work with hyperscalers — but that's not the full picture Huang says Nvidia's work with hyperscalers like Microsoft Azure and AWS only represents "half the picture." Huang says Nvidia's work with smaller, more specialized firms is important, too. "They really need an entire factory platform built for them," Huang says. "We add just a tremendous amount of value." 2026-08-26T21:45:52.000Z Ben Shimkus Copied! Jensen Huang says Nvidia is 'building something different' than OpenAI An investor asks Nvidia's CEO about competition from OpenAI, which just announced its Jalapeño custom inference chip. Jensen Huang doesn't seem too worried about the new contender. "We're building something very different," he says. "Nvidia is a platform, an entire AI factory platform that spans the entire AI lifecycle that you can use in any cloud." An investor asks Nvidia's CEO about competition from OpenAI, which just announced its Jalapeño custom inference chip. Jensen Huang doesn't seem too worried about the new contender. "We're building something very different," he says. "Nvidia is a platform, an entire AI factory platform that spans the entire AI lifecycle that you can use in any cloud." "The only regret that I have is that I didn't invest more, sooner," he adds. See more less 2026-08-26T21:37:22.000Z Ben Shimkus Copied! CEO Jensen Huang explains why Nvidia is giving full-year revenue guidance — a first Nvidia's expanding work with suppliers, power generators, and data center developers gives the company greater visibility into the future of the AI boom, Huang says. The company is sharing its first-ever full-year revenue guidance so its customers and suppliers — all committing significant funds to the AI build-out — can use the same expectations, the CEO says. 2026-08-26T21:33:25.000Z Ben Shimkus Copied! We're onto the live Q&A section. Nvidia CEO Jensen Huang fields the first question. CEO Jensen Huang kicks off the Q&A section with analysts. He's answering a question about Nvidia's confidence heading into the next quarter. 2026-08-26T21:30:14.000Z Brent D. Griffiths Copied! Nvidia warns it's experiencing 'extreme pricing conditions in memory' Nvidia's CFO says the cost of memory has surpassed Nvidia's expectations: "The magnitude of the price increase has exceeded our prior expectations and are headed even higher into next year," Colette Kress says. She stresses that "tighter memory supply is a symptom of the same demand surge that's driving our own growth." Nvidia expects supply to remain a bottleneck "at least through the end of fiscal year 28." 2026-08-26T21:29:57.000Z Ben Shimkus Copied! Nvidia isn't betting on China chip trade troubles to be resolved anytime soon Kress says Nvidia isn't including revenue from China in its next-quarter expectations because of "ongoing geopolitical uncertainty." She says less than 1% of Nvidia's total data center revenue in Hopper 200 products went to customers in China in the last quarter. The company is still expecting revenue in its next quarter to race past $100 billion, even without any revenue from China. 2026-08-26T21:27:28.000Z Truman Dickerson Copied! Nvidia denies 'circular financing': 'We see it differently CFO Kress pushes back against the idea that Nvidia will forever be supporting the same companies that buy its chips. "We recognize the scale of this support, and we know some will call this circular financing," Kress says. "We see it differently." CFO Kress pushes back against the idea that Nvidia will forever be supporting the same companies that buy its chips. "We recognize the scale of this support, and we know some will call this circular financing," Kress says. "We see it differently." Kress says Nvidia believes it will see a return on its investments. "The NVIDIA compute platform is fungible and durable, and can be redeployed to support other customers," she says. See more less 2026-08-26T21:22:41.000Z Brent D. Griffiths Copied! Nvidia touts how 'it gets paid twice' with data center financing CFO Kress says Nvidia is not making "loans" for data center buildouts. Instead, she says the world's largest company by market cap is coming out ahead in the revenue-share deals it's striking. "We get paid twice, once on the hardware sale and again through the share of rental revenue," she says. She adds that "independent capital still underwrites every deal on its merits." 2026-08-26T21:20:02.000Z Steven Tweedie Editor Copied! Wall Street likes what it's hearing: Nvidia's stock tips green as analyst call progresses Nvidia stock was down after hours immediately following the earnings release — now, nearly 20 minutes into the analyst call, the stock is trading up 4%. 2026-08-26T21:17:34.000Z Brent D. Griffiths Copied! Rising adoption of agentic AI is driving CPU demand, Nvidia says CFO Colette Kress says Nvidia continues to "see demand for approximately 20 billion in total server CPUs." Increasingly, these chips are being used to power AI agents. She says that the company's outlook "is for CPU revenue to more than double" in fiscal 2028, "positioning us as one of the world's leading server CPU suppliers." 2026-08-26T21:15:33.000Z Ben Shimkus Copied! Nvidia sees a market beyond the hyperscalers We know that Nvidia has sold billions of dollars' worth of chips to AI labs like OpenAI and Anthropic. Now, it sees more opportunity beyond the massive AI companies. "Beyond the hyperscalers lies a massive market anxious to adopt AI," Kress says in her opening remarks, "customers with no interest in designing their own custom silicon." 2026-08-26T21:10:29.000Z Truman Dickerson Copied! Nvidia + AWS = growing partnership CFO Colette Kress announces "an expansion" of Nvidia's partnership with Amazon Web Services. "AWS is deploying an additional 2 million GPUs starting this quarter," Kress says. Kress adds that Amazon will adopt Nvidia's physical stack to power its warehouse robots. 2026-08-26T21:09:43.000Z Steven Tweedie Editor Copied! Nvidia: 'We're growing share' as closed and open-source AI model adoption grows "Closed and open models alike, adoption is skyrocketing," Nvidia's CFO says. "Nvidia runs the leading closed models." 2026-08-26T21:06:02.000Z Ben Shimkus Copied! Nvidia projects major growth in the coming year — and supply constraints CFO Colette Kress says Nvidia expects revenue to grow by 70% in fiscal 2028, adding that "this is a supply-constrained outlook." 2026-08-26T21:05:47.000Z Steven Tweedie Editor Copied! Nvidia CFO touts 'sustained strength in Blackwell' "Hyperscale revenue of 49 billion grew 13% sequentially, driven by sustained strength in Blackwell, reinforcing that more compute drives more revenue as new GPU capacity comes online," CFO Colette Kress says. "Our hyperscale customers delivered strong financial results in the quarter with accelerating revenue growth and expanding margins." 2026-08-26T21:01:09.000Z Steven Tweedie Editor Copied! And we're off! Nvidia's earnings call begins. Nvidia CEO Jensen Huang and CFO Colette Kress are on the line and will begin with prepared remarks followed by a live Q&A with analysts. 2026-08-26T20:52:58.000Z Steven Tweedie Editor Copied! Analyst reacts: "A slim beat from Nvidia shows just how high the bar has become." "Even extraordinary growth can fail to satisfy investors as scrutiny of AI spending and its financing intensifies," writes Emarketer analyst Jacob Bourne. "Nvidia still faces a changing competitive landscape, with some of its largest customers developing their own chips while startups target parts of the AI compute market," Bourne says. "Yet Nvidia continues to deepen its relevance across the AI stack, expanding beyond training into inference, models, networking, and broader AI infrastructure. Its ability to adapt as AI workloads and competitive dynamics evolve provides a strong argument for the durability of its position." 2026-08-26T20:50:39.000Z Ben Shimkus Copied! Nvidia says some companies are growing faster than their balance sheets can support The chipmaker writes in its 8-K that it's stepping in to help customers secure land, power, and data center capacity. It's another sign that the company remains a key financier in the AI boom — something that has some investors skittish amid concerns of circular financing. 2026-08-26T20:41:37.000Z Geoff Weiss Nvidia reporter Copied! Nvidia's outlook beats expectations Nvidia expects demand for its AI chips to keep surging. The chip giant said it expects $108 billion in revenue for the third quarter, plus or minus 2%. That's above the $104.57 billion expected by analysts. Nvidia expects demand for its AI chips to keep surging. The chip giant said it expects $108 billion in revenue for the third quarter, plus or minus 2%. That's above the $104.57 billion expected by analysts. Even more notable: Nvidia's forecast is assuming no data center compute revenue from China, meaning the company expects to surpass Wall Street expectations without relying on a return to the Chinese market. See more less 2026-08-26T20:33:44.000Z Brent D. Griffiths Copied! Nvidia's investments in procuring memory components are going up Nvidia CFO Colette Kress said in her earnings commentary that the company is expanding its efforts to secure enough memory. "We've partnered with our extensive network of suppliers to secure the critical components needed to meet demand for the next several years," the CFO said. "Our commitments increased from $119 billion last quarter to $279 billion, primarily related to the procurement of memory." Nvidia CFO Colette Kress said in her earnings commentary that the company is expanding its efforts to secure enough memory. "We've partnered with our extensive network of suppliers to secure the critical components needed to meet demand for the next several years," the CFO said. "Our commitments increased from $119 billion last quarter to $279 billion, primarily related to the procurement of memory." The availability of memory is viewed as a major limiting factor in AI buildout more broadly. See more less 2026-08-26T20:26:31.000Z Steven Tweedie Editor Copied! Nvidia's earnings are out — see the key numbers Revenue: $96.2 billion vs. $92.29 billion estimate Adjusted EPS: $2.22 vs. $2.09 estimate Data center revenue: $89.0 billion vs. $85.83 billion estimate Adjusted gross margin: 75% vs. 75% estimate 2026-08-26T19:39:11.000Z Max Adams Copied! Nvidia stock dips about 1% heading into the report Shares were down at about 3:35 p.m. as investors braced for the results. The stock dipped 1% to $210.56, slightly higher than the intraday low of $209.47. Option pricing implies a 5% move in either direction after earnings, or about a $280 billion swing in market cap. 2026-08-26T19:33:16.000Z Geoff Weiss Copied! Nvidia's deal spree is picking up via Smith Collection/Gado/Getty Images Nvidia has been on an aggressive dealmaking spree in recent weeks, spending and investing across the AI ecosystem. In August alone, Nvidia announced a $1.5 billion investment in data center developer SB Energy and took a minority stake in Cloverleaf Infrastructure, another company helping build data centers. Nvidia also struck a multibillion-dollar deal with AI startup Poolside, investing in the company and bringing over more than 100 employees. Nvidia has been on an aggressive dealmaking spree in recent weeks, spending and investing across the AI ecosystem. In August alone, Nvidia announced a $1.5 billion investment in data center developer SB Energy and took a minority stake in Cloverleaf Infrastructure, another company helping build data centers. Nvidia also struck a multibillion-dollar deal with AI startup Poolside, investing in the company and bringing over more than 100 employees. More could be coming. Bloomberg reported last week that Huang met with the CEO of Rebellions, a Korean inference chip startup, and The Information reported it was in talks to invest in Perplexity. The moves raise a bigger question: How aggressively does Nvidia plan to use its massive cash pile to widen its moat ? See more less 2026-08-26T19:15:39.000Z Hugh Langley Copied! Guidance is everything A pattern has held for four straight quarters of earnings: Nvidia beats expectations, and the stock falls anyway. Chris Beauchamp, chief market analyst at IG, said Nvidia has become a victim of its own success. "Beating expectations isn't enough and hasn't been for a while," he said. "What matters now is the guidance for Q3 and beyond," he added, noting that investors want signs that demand is broadening beyond the hyperscalers. Nvidia is still the chip king, but with new market dynamics at play, it needs to reassure investors that it has plenty of room to run. "That kind of guidance would really be needed to trigger a rerating in valuation," Beauchamp added. 2026-08-26T18:50:14.000Z Jennifer Sor Copied! Memory price inflation could be bullish for Nvidia Memory costs have soared in 2026, prompting consumer brands like Apple to raise some prices Chris Jung/NurPhoto via Getty Images UBS said it expects Nvidia to post revenue of around $94 billion to $95 billion for the quarter, with revenue in the following quarter likely exceeding $110 billion. "We think the numbers are more important than the narrative, and coming out of this call, we expect investors to gain greater confidence in a path to $15+ EPS in C2027E and $20 in C2028E - numbers that should keep the stock grinding higher," UBS wrote. UBS said it expects Nvidia to post revenue of around $94 billion to $95 billion for the quarter, with revenue in the following quarter likely exceeding $110 billion. "We think the numbers are more important than the narrative, and coming out of this call, we expect investors to gain greater confidence in a path to $15+ EPS in C2027E and $20 in C2028E - numbers that should keep the stock grinding higher," UBS wrote. Hyperscalers have raised capex estimates for the year, most of which is attributed to memory price inflation , the analysts noted. "This is ultimately bullish for NVDA, and as a result, we may hear about another significant stair-step in backlog on this earnings call," they added. The bank reiterated its "buy" rating and $280 price target on the stock, implying 31 upside from current levels. See more less 2026-08-26T18:08:15.000Z Jennifer Sor Copied! Jefferies eyes strong growth trajectory for Rubin Jefferies predicts that Nvidia will beat on earnings and raise estimates for this quarter, given the firm's "rock-solid" data points. Nvidia is likely to post $95 billion in revenue for the second quarter and $108 billion in revenue for the third quarter, a team of analysts led by Blayne Curtis said. Rubin is also likely to see strong growth, with the ramp accounting for more than 40% of Nvidia's total revenue by the end of the fiscal year. Jefferies predicts that Nvidia will beat on earnings and raise estimates for this quarter, given the firm's "rock-solid" data points. Nvidia is likely to post $95 billion in revenue for the second quarter and $108 billion in revenue for the third quarter, a team of analysts led by Blayne Curtis said. Rubin is also likely to see strong growth, with the ramp accounting for more than 40% of Nvidia's total revenue by the end of the fiscal year. "Positioning looks favorable given low valuation and new product cycle," the analysts wrote said. Jefferies issued a "buy" rating and a $300 price target for Nvidia, implying 40% upside for shares. See more less 2026-08-26T17:05:04.000Z Hugh Langley Copied! A hyperscaler headache An Amazon data center in Virginia Brendan Smialowski / AFP via Getty Images Some of Nvidia's biggest customers are struggling to out-earn their AI spending. Google reported a negative free cash flow of $5.9 billion in Q2, while Amazon's free cash flow fell to a $7.6 billion outflow for the 12 months ending in June. Meta's free cash flow plunged 91% from the previous year. Given that these companies buy Nvidia's chips for internal use and to rent them to their own customers, having less cash is potentially a problem for Nvidia. On top of that, Google and Amazon are firing up their own competing chip businesses. Google said it delivered its first TPUs (Tensor Processing Units) to customer data centers in Q2, and Amazon said it is also in discussions to sell its Trainium chips directly. Nvidia said in November that it was "delighted" by Google's success — but are Nvidia's investors? 2026-08-26T16:15:37.000Z Jennifer Sor Copied! BofA says Nvidia remains a 'top sector pick' BofA says Nvidia is a top pick in semiconductors, and pointed to five things investors should focus on heading into the earnings call: The launch and supply of Vera Rubin , and if there are changes to Nvidia's forecast that it can generate more than $1 trillion in revenue from 2025 to 2027 Clarity on vendor financing and backstops in Nvidia's deal with OpenAI, and when cash can shift to buybacks Whether Nvidia can maintain gross margins despite memory cost inflation How fast demand is growing among hyperscalers and the accelerated-computing infrastructure and enterprise-related firms Nvidia works with If open-source AI models become more popular relative to closed models, and the implications that could have on Nvidia's addressable market. The bank reiterated its "buy" rating and its $350 price target for the stock, implying 64% upside from current levels. 2026-08-26T15:42:44.000Z Tom Carter Copied! Nvidia's cash cow vs AI uncertainty ANGELA WEISS / AFP via Getty Images Nvidia's tangled web of AI deals is fuelling investor uncertainty around the broader AI industry, but that is unlikely to stop the company from posting another round of blockbuster earnings. Naveen Chhabra, a principal analyst at Forrester, said that despite all the headwinds buffeting the AI industry, Nvidia was still expected to announce a record-breaking quarter as it pursues a $1 trillion order book through 2027. Nvidia's tangled web of AI deals is fuelling investor uncertainty around the broader AI industry, but that is unlikely to stop the company from posting another round of blockbuster earnings. Naveen Chhabra, a principal analyst at Forrester, said that despite all the headwinds buffeting the AI industry, Nvidia was still expected to announce a record-breaking quarter as it pursues a $1 trillion order book through 2027. Its earnings will be a "battle between jaw-dropping margins and the broader macroeconomic anxiety over when AI spending will break its own records by a big margin," Chhabra said. See more less 2026-08-26T14:30:55.000Z Jennifer Sor Copied! Details on customer financing, Rubin could be a catalyst, GS says Goldman analysts said they expected Nvidia to "deliver solid results" for the second quarter and issue guidance "well-above" consensus estimates for the following three-month period, largely due to the boom in datacenters and expectations for Nvidia to begin its Rubin ramp in the third quarter. The bank added that it expects earnings per share to come in at around 6% above consensus estimates for the second quarter, and 12% above estimates for the third quarter. Goldman analysts said they expected Nvidia to "deliver solid results" for the second quarter and issue guidance "well-above" consensus estimates for the following three-month period, largely due to the boom in datacenters and expectations for Nvidia to begin its Rubin ramp in the third quarter. The bank added that it expects earnings per share to come in at around 6% above consensus estimates for the second quarter, and 12% above estimates for the third quarter. Analysts also listed several talking points likely to move Nvidia stock, with details on the company's $500 billion customer financing platform and the Rubin ramp at the top of the list. The focus among investors will also likely be centered on issues like AI monetization and the return on investment among hyperscalers, and whether Nvidia can maintain its gross margins, it added. The bank reiterated its "buy" rating and $285 price target, implying 33% upside. See more less 2026-08-26T14:10:34.000Z Jennifer Sor Copied! JPMorgan flags what could move the stock Bloomberg/Getty Images JPMorgan analysts are anticipating Nvidia to beat on earnings and lift guidance for the current quarter. The bank said it expects revenue to come in at around $94 billion to $95 billion, a 15% increase from the first quarter. Analysts said Nvidia's stock was unlikely to see a strong trading day, pointing to historical drops following its past earnings reports. Analysts said shares would be more likely to move based on these topics that could come up on the call: JPMorgan analysts are anticipating Nvidia to beat on earnings and lift guidance for the current quarter. The bank said it expects revenue to come in at around $94 billion to $95 billion, a 15% increase from the first quarter. Analysts said Nvidia's stock was unlikely to see a strong trading day, pointing to historical drops following its past earnings reports. Analysts said shares would be more likely to move based on these topics that could come up on the call: Nvidia's position relative to its competitors Details around Nvidia's infrastructure funding agreements The outlook for Nvidia's business in China The bank reiterated its "overweight" rating on the stock and $280 price target, implying 31% upside. See more less 2026-08-26T13:25:55.000Z Max Adams Copied! Wall Street expects revenue of $92.3 billion, EPS of $2.09 Second quarter Revenue estimate $92.29 billion (Bloomberg Consensus) Data center revenue estimate $85.83 billion Hyperscale Revenue estimate $43.55 billion AI Clouds, Industrial, & Enterprise revenue estimate $41.96 billion Edge Computing revenue estimate $6.61 billion Graphics revenue estimate $7.64 billion Compute & Networking revenue estimate $84.69 billion Adjusted gross margin estimate 75% Adjusted operating expenses estimate $8.32 billion Adjusted operating income estimate $61.19 billion R&D expenses estimate $7 billion Adjusted EPS estimate $2.09 Capital expenditure estimate $1.89 billion Third quarter Revenue estimate $104.57 billion Adjusted gross margin estimate 74.8% Adjusted operating expenses estimate $8.88 billion Capital expenditure estimate $1.97 billion 2027 year Second quarter Revenue estimate $92.29 billion (Bloomberg Consensus) Data center revenue estimate $85.83 billion Hyperscale Revenue estimate $43.55 billion AI Clouds, Industrial, & Enterprise revenue estimate $41.96 billion Edge Computing revenue estimate $6.61 billion Graphics revenue estimate $7.64 billion Compute & Networking revenue estimate $84.69 billion Adjusted gross margin estimate 75% Adjusted operating expenses estimate $8.32 billion Adjusted operating income estimate $61.19 billion R&D expenses estimate $7 billion Adjusted EPS estimate $2.09 Capital expenditure estimate $1.89 billion Third quarter Revenue estimate $104.57 billion Adjusted gross margin estimate 74.8% Adjusted operating expenses estimate $8.88 billion Capital expenditure estimate $1.97 billion 2027 year Revenue estimate $395.47 billion Capital expenditure estimate $8 billion Adjusted tax rate estimate 16.8% Source: Bloomberg See more less