Records Smashed Again, Market Begins to Question How Long Growth Can Last
Nvidia has once again delivered a stellar earnings report, with revenue, operating profit, and earnings per share all reaching record highs. For the second quarter of fiscal year 2027, revenue was $96.221 billion, a year-over-year increase of 106% and a sequential increase of 18%; net profit was $59.688 billion, up 126% year-over-year; diluted earnings per share were $2.46, a 128% increase from the prior year. Compared to $46.743 billion in revenue in the same quarter last year, Nvidia has managed to double its quarterly revenue in just one year.
However, following the release of the strong results, the stock price did not immediately rise but initially fell approximately 1.3% in after-hours trading. This reflects a shift in market focus: in the past, investors were primarily concerned with whether Nvidia could continue to exceed expectations; now, they are more interested in how long AI infrastructure construction can continue and whether next-generation chips and new business models can support future growth.
Data Center Remains Core Growth Driver, Customer Base is Expanding
Second-quarter data center revenue reached $89.023 billion, a year-over-year increase of 117% and a sequential increase of 18%, accounting for nearly all of the incremental revenue. Nvidia began categorizing its data center customers in the previous quarter into two groups: hyperscale customers, and AI cloud, industrial, and enterprise customers.
Among these, hyperscale customer revenue was $48.710 billion, up 102% year-over-year and 13% sequentially; revenue from AI cloud, industrial, and enterprise customers was $40.313 billion, up 138% year-over-year and 25% sequentially. This indicates that AI computing demand is expanding from a few major cloud giants to AI-native companies, traditional corporations, sovereign AI initiatives, and more industry-specific scenarios. However, investors are also beginning to focus on the profitability and long-term demand of these new customers, not just the size of the orders.
The Chinese market remains a significant variable. Nvidia stated that shipments of data center Hopper products to mainland China accounted for less than 1% of total data center revenue in the second quarter, and third-quarter guidance does not include any data center computing revenue from mainland China.
Blackwell Ultra Ramps Up, Vera Rubin Enters Full Production
The growth in the second quarter's data center segment was primarily driven by the large-scale deployment of Blackwell Ultra infrastructure. Meanwhile, the Vera Rubin platform has entered full production, with related rack systems already operational on partner platforms such as CoreWeave and Google Cloud. Rubin encompasses not only GPUs but also CPUs, networking, software, and system-level solutions.
Nvidia also launched the DSX platform for AI infrastructure builders and continues to expand its Agent Toolkit, PhysicsNeMo, and CUDA-X software libraries. For Nvidia, competition is no longer limited to the performance of a single chip but revolves around the complete ecosystem comprised of chips, networking, software, and systems. The market will now closely monitor the pace of the transition from Blackwell to Rubin and whether the new platform can continue to drive customers to expand their capital expenditures.
AI Infrastructure Enters the Financing Stage
As data center scale expands, Nvidia's involvement in infrastructure construction is also deepening. The company has established strategic partnerships with institutions such as Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR, planning to mobilize over $500 billion in third-party capital for AI infrastructure development.
This model, on one hand, helps customers secure funding and expand GPU procurement; on the other hand, it also draws increased market attention to Nvidia's capital pressures, credit support, and potential recurring financing risks. The company issued $25 billion in senior unsecured notes in the second quarter and stated that future investments will primarily support the supply chain, infrastructure, and long-term growth.
Nvidia expects third-quarter revenue of $108.0 billion with a gross margin of approximately 74%. Future growth hinges on answering three key questions: Can Blackwell Ultra and Rubin continue to drive customer procurement? Can AI infrastructure investment maintain its current pace? And, amid competition from AMD, Google's self-developed TPUs, and more custom chips, can Nvidia maintain its market share? While near-term performance exceeding expectations supports the stock price, mid-term pricing will increasingly depend on order sustainability and the return on capital expenditure.
