Nvidia guides to 70% revenue growth as AI demand widens despite supply limits

Nvidia told investors it expects revenue to jump 70 percent in the next fiscal year, a bold projection that underscores the companys confidence in continued demand for artificial intelligence computing even as component shortages constrain how much business it can capture.

The chipmaker reported second-quarter revenue of $96.22 billion more than double year-ago levels and ahead of Street estimates of $92.17 billion driven by surging data-centre sales. Adjusted earnings were $2.22 a share for the quarter ended July 26, beating the $2.10 analysts expected. Nvidias shares rose roughly 5 percent in after-hours trading after dipping initially.

Chief executive Jensen Huang framed the results as a signal that AI has moved beyond experimentation. AI has reached its inflection point. Its doing useful work. Its tokens are productive and profitable. Now, compute is revenue, he said, while the company laid out a multi-year roadmap that includes ramping its next-generation Vera Rubin processors.

Executives said demand is broadening beyond the traditional hyperscalers. AI labs, so-called neo-clouds, enterprises, sovereign buyers and industrial customers are all contributing to growth, reducing Nvidias reliance on a handful of giant cloud providers. The company expects AI labs alone to make up roughly a quarter of its overall business next year.

Nvidia disclosed an unusually long-term forecast 70 percent revenue growth for the fiscal year ending January 2028 a level well above analysts consensus of about 44 percent. Weve never forecast or never guided to a year in advance, Huang acknowledged, highlighting the unusual scale and confidence of the projection.

Supply constraints could limit how much of that demand Nvidia can fulfil. Finance chief Colette Kress told analysts the company is supply-constrained, pointing to shortages of memory components and higher component costs. Those pressures will weigh on gross margins, which the company expects to bottom in the fourth quarter at roughly 7172 percent, down from about 74 percent in the third quarter; analysts had been forecasting around 74.77 percent.

Management provided guidance for the near term as well: Nvidia forecast third-quarter revenue of $108 billion, plus or minus 2 percent, compared with the LSEG consensus of $104.19 billion. The company also said its Vera Rubin platform, which has begun shipping, will account for about one-fifth of datacentre revenue in the quarter ending in October.

Nvidia outlined capacity gains across a wider ecosystem of buyers. It said neo-clouds vendors such as CoreWeave and other GPU-focused providers are expected to exit the year with more than 8 gigawatts of Nvidia GPU capacity, up from about 3 gigawatts at the end of the prior year. Nvidia also announced an expanded partnership with Amazon Web Services to deploy an additional 2 million Nvidia GPUs across AWS infrastructure in 2027 and 2028.

The company did not include China data-centre revenue in its formal outlook, reflecting ongoing uncertainty there. Washington in May approved around 10 Chinese firms to buy one of Nvidias top AI chips, the H200, but deliveries stalled; a US Commerce official last month said shipments had started but were still very few. Nvidia has begun offering its new Vera CPU to Chinese customers, saying it could be available by August, but the firm kept China out of its forward revenue picture.

For investors, Nvidias guidance is intended to reassure that the AI spending cycle is expanding rather than peaking. Market strategists noted the credibility of the forecast is bolstered by the broadening base of customers beyond a narrow set of hyperscalers. At the same time, the firms acknowledgement of supply limits and margin pressure serves as a reminder that execution and component costs will shape how much of the opportunity the company can monetise.

Overall, Nvidias results and unusually forward-looking guidance signal a company positioning itself at the centre of the AI infrastructure boom, while recognising short-term supply constraints that will temper margin expansion in the coming quarters.