Santa Clara: Nvidia has signalled that demand for artificial intelligence infrastructure could remain strong for several years after reporting quarterly revenue of $96.2 billion and forecasting another major increase in sales.
The US chipmaker reported revenue of $96.2 billion for the second quarter of its fiscal 2027, which ended on July 26. Revenue increased 106 per cent from the same period a year earlier.
Nvidia forecast third quarter revenue of $108 billion, plus or minus 2 per cent. The company also expects revenue to grow by about 70 per cent in fiscal 2028. Nvidia said its current third quarter forecast does not include any data centre computing revenue from China.
The results show that demand for the computing systems needed to develop and run artificial intelligence remains exceptionally strong. Nvidia's ability to meet that demand, however, is being limited by supply.
Nvidia's data centre business remains the main force behind its growth. Revenue from data centre products reached $89 billion in the latest quarter, an increase of 117 per cent from a year earlier.
The figures underline how quickly Nvidia has expanded from its traditional graphics chip business into a major supplier of computing infrastructure for artificial intelligence.
Chief executive Jensen Huang said artificial intelligence had reached an important turning point, with companies increasingly using the technology for practical work.
Nvidia said demand is coming from a wider group of customers, including AI laboratories, startups, enterprises, cloud providers and governments. The company believes this broader demand can support continued growth as artificial intelligence moves into more areas of the economy.
Nvidia is also preparing for its next major generation of AI computing technology. The company said its Vera Rubin platform is moving into full production, with systems running at CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius.
The company is also expanding its relationship with Amazon Web Services. AWS and Nvidia have announced plans to deploy an additional two million Nvidia GPUs across AWS infrastructure in 2027 and 2028.
The expansion is another indication of the large investments being made by cloud companies to prepare for increasing AI workloads.
At the same time, supply remains an important challenge for Nvidia. The company says demand is greater than the amount of computing equipment it can currently supply. Memory supply constraints are also limiting how quickly Nvidia can expand production.
This means Nvidia's future growth will depend not only on whether customers continue to spend heavily on artificial intelligence, but also on whether the company and its suppliers can produce enough equipment to meet that demand.
China remains another important uncertainty.
Nvidia said shipments of its Data Center Hopper products to China accounted for less than 1 per cent of data centre revenue in the latest quarter. However, the company is still assuming no data centre computing revenue from China in its next quarter forecast.
US export restrictions continue to make the Chinese market uncertain for Nvidia. The company must also deal with changing rules governing advanced AI chips and the wider competition in the Chinese technology market.
Nvidia is becoming more involved in financing the wider expansion of AI infrastructure. Earlier this month, the company announced partnerships with major financial institutions including Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR. The companies aim to mobilise more than $500 billion in third party capital for AI infrastructure over time.
Nvidia has also agreed to provide financial guarantees of up to $105 billion linked to an Ohio data centre project being developed for OpenAI. The figure represents a potential financial obligation, not an upfront cash payment by Nvidia. Nvidia is also investing $1.5 billion in SB Energy, which is developing the project.
These arrangements have raised questions about the financial risks involved as chipmakers, AI companies, cloud providers and investors increasingly invest in the same infrastructure.
For now, Nvidia's financial results show that demand remains extremely strong. The company reported net income of $59.7 billion for the latest quarter, while gross margin was 75 per cent.
The challenge for Nvidia is to maintain this momentum as the artificial intelligence industry develops. The company expects demand to expand across businesses, scientific research, robotics and government projects.
Investors, however, will be watching whether the enormous spending on AI produces enough economic value to justify the cost of building the required computing infrastructure.
Nvidia's latest results provide strong evidence that the AI infrastructure boom is continuing. But supply constraints, export restrictions and growing financial risks mean the next stage of the expansion could be more complicated than the current growth figures suggest.