Nvidia Earnings Beat: $96.2B Revenue and $108B Guide Lift Stock

A quiet morning before a loud evening

On Wednesday, August 26, U.S. stock futures went almost nowhere. Traders were waiting on two events that could move markets: the Federal Reserve's preferred inflation gauge in the morning and Nvidia's fiscal second-quarter results after the close. Shortly after 7 a.m. ET, Dow E-minis were up a fraction, while S&P 500 and Nasdaq 100 contracts were slightly lower.5 Investopedia's pre-market read showed the same picture: Dow futures up less than 0.1%, and S&P 500 and Nasdaq futures down 0.1% and 0.2%.2

The flat trading came after a solid Tuesday. The Dow and S&P 500 each gained 0.3%, and the Nasdaq Composite rose 0.7%. AI-linked names led the move, with Nvidia up 2.2% and AMD up 4.9%.4 Coverage agreed on why traders held back on Wednesday. Treasury yields had hit multi-year highs the week before, oil remained a wild card because of the Middle East conflict, and Fed Chair Kevin Warsh was due to speak at Jackson Hole on Friday.56

The inflation data arrived without a major surprise. Core PCE rose 0.2% in July and 3.3% from a year earlier, matching estimates.6 Headline PCE came in slightly hotter than expected, and the S&P 500 finished essentially flat at 7,675.70.6 Morgan Stanley Wealth Management's Ellen Zentner said the small upside surprise and steady economic strength were not what investors or the Fed hoped for, but they were not enough to change the outlook for the September meeting.6 Reuters reported that traders had priced in one 25-basis-point rate hike for 2026.5 That context matters. The market was not waiting on Nvidia during an easing cycle. It was waiting while the Fed was considering a hike.

What Wall Street expected

Analysts set a high bar, and each data provider set it slightly differently. Visible Alpha's consensus called for earnings of $2.10 per share on about $92 billion in revenue, roughly double the year-ago figures.2 FactSet had $2.09 per share on $92.28 billion.6 LSEG had revenue of $92.18 billion, which Investing.com noted would be Nvidia's fastest growth rate in seven quarters.4 Nvidia's own guidance from May was lower, at $91 billion plus or minus 2%.25

Several analysts said the published consensus was not the real target. Johnson Investment Counsel's Brandon Zureick said buy-side expectations were well above the $91 billion guide. He called the July quarter mostly a formality, because investors cared most about the October-quarter outlook.22 One CIO quoted by Kiplinger put it more bluntly: consensus for the third quarter was around $104 billion, the buy side was whispering higher, and that gap would decide the stock's reaction.22

That pressure came from Nvidia's recent history. According to Bespoke Data, cited by CNBC, the stock had fallen the day after each of its previous four reports, even though the company met or beat estimates every time.23 Shares had risen only about 13% in 2026 heading into the report. On the day of the report, the stock was on track for its eighth loss in nine sessions.6 ADM Investor Services' Marc Ostwald told Reuters that Nvidia's recent lag behind other semiconductor stocks showed the market was worried about the AI investment boom.3

The numbers

Nvidia beat on every headline measure. Revenue reached a record $96.22 billion, up 106% from $46.74 billion a year earlier. Adjusted earnings were $2.22 per share.1216 The size of the beat depends on which consensus you use. Against Visible Alpha's $92.37 billion and $2.10, revenue beat by about $3.9 billion.12 Against Zacks' $2.09, the earnings surprise was 6.22%, and the revenue surprise was 4.82%.16 MarketBeat recorded a $0.13 beat on GAAP-adjusted consensus, with GAAP EPS of $2.46.15

Data center revenue drove the quarter. It rose 117% to a record $89 billion, against estimates near $85.4 billion.1329 The segment now makes up 92% of Nvidia's sales.20 Within data center, the fastest growth came from outside the biggest cloud companies. Sales to AI clouds, industrial, and enterprise customers jumped 138% to $40.3 billion, while hyperscaler revenue more than doubled to $48.7 billion.20 Adjusted net income was about $53.95 billion.29 Nvidia also returned $26 billion to shareholders through buybacks and dividends during the quarter.12

Gross margin held at 75% for a second straight quarter, up from 72.7% a year earlier.2223

Guidance is what moved the stock

The forecast mattered more than the past quarter. Nvidia guided third-quarter revenue to $108 billion, plus or minus 2%. The consensus that guide beat ranges from $103.9 billion to $105.39 billion, depending on the source.131220 The guide still excludes any data center revenue from China, so any sales there would be extra.2022

The bigger surprise was a preliminary forecast of about 70% revenue growth in fiscal 2028. CNBC described that as far above estimates.20 Huang called the outlook "supply constrained" and said Nvidia was working with suppliers on bottlenecks.22

The product transition also went better than many feared. Vera Rubin, Nvidia's next-generation platform, began production shipments in August. Management expects it to account for about 20% of third-quarter data center revenue, and the company says purchase orders have come in from every major hyperscaler, AI cloud, and system OEM.29 REX Financial's Bill Birmingham called it about as clean a handoff from Blackwell Ultra to Rubin as investors could have hoped for.22

Where the coverage disagrees

There are two main points of tension.

Growth is slowing. Year-over-year growth had accelerated for five straight quarters and reached 106%. The $108 billion guide implies growth in the mid-to-high 80% range, and sequential growth slows to roughly 12%.1226 An analyst quoted by Investopedia said the slowdown is not "thesis-breaking." He pointed to compute commitments that rose from $119 billion to $279 billion in a single quarter.12

Margins and commitments are rising risks. Nvidia expects gross margin to fall to 74% this quarter and bottom at 71% to 72% in the fiscal fourth quarter, mainly because of memory costs.23 It sees margins settling around 72% to 73% in fiscal 2028, with help from price increases already in place.29 Zureick called the 74% guide "a hair light."22 One bearish analysis noted that supply commitments, mostly memory tied to Vera Rubin, more than doubled to $279 billion. That is a fixed obligation that would hurt if demand cooled before it was worked off.24 Inventory also rose to $32 billion ahead of the Rubin launch. Zureick added that the company still needs to make investors comfortable with its new financing arrangements, including backstops for AI data center projects and partnerships aimed at more than $500 billion in AI capital.22

The reports on the stock's reaction also differ. CNBC said shares rose about 4% after hours.23 Kiplinger tracked a gain of almost 5% during the CFO's remarks and a more than 6% premarket gain on Thursday.22 One syndicated recap said shares fell 1.8% after hours.24 The Thursday close settles it: Nvidia jumped 8.7%, its biggest one-day gain since April 9, 2025, according to Kiplinger.22 The S&P 500 and Nasdaq both closed higher that day, with the Nasdaq up sharply.2 The weaker after-hours figure looks like an early print before the earnings call shifted sentiment.

Accounts of Nvidia's beat streak also vary. One analyst called this the 15th straight beat.22 MarketBeat's history shows an EPS miss in May 2025, even though revenue topped estimates that quarter.15

The takeaway

This report ended a pattern where Nvidia beat estimates and the stock fell anyway, and the reason is clear. The second-quarter beat was solid but not unusual, because Nvidia's beats have been getting smaller over time.25 What changed was the longer-term picture. A 70% growth outlook for fiscal 2028 and evidence that Rubin is already shipping in volume gave investors something beyond the next quarter to price in.

The risks have not gone away. Margins are guided lower, large supply commitments are already locked in, and a Fed that may raise rates could limit how much investors will pay for future growth. For now, Nvidia has shown that it can keep growing at this scale. The next tests are whether it can protect its margins and fund the buildout without the balance sheet becoming the main concern.