Nvidia announced Q2 FY2027 earnings with revenue of $96.2 billion, up 106% year-over-year, driven by data center revenue of $89 billion. CEO Jensen Huang said AI has reached a tipping point, with compute as revenue and accelerating demand. The company forecasts ~$108 billion next quarter and plans to mobilize over $500 billion for AI infrastructure, reflecting sustained growth in AI compute.
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Nvidia's Q2 FY2027 earnings show revenue up 106% year-over-year, with data center contributing 92.5%, but a slight gross margin dip, China shipments under 1% of revenue, and circular financing controversy cast uncertainty behind the impressive results.
Nvidia reported Q2 FY2027 earnings on August 26, 2026, with revenue of $96.2 billion, up 106% year-over-year. Data center revenue contributed $89 billion, accounting for 92.5% of total revenue, up 117% year-over-year. Jensen Huang stated, 'AI has reached its tipping point,' and emphasized that 'compute is revenue, and demand is accelerating.'
Growth was driven by continued GPU purchases from hyperscalers (Microsoft, Google, Amazon, Meta) and expansion of emerging AI labs and startups. CFO Colette Kress disclosed that Nvidia has made $27.9 billion in long-term procurement commitments for future supply, primarily for memory and other key components, more than doubling from $11.9 billion in the prior quarter. Including other arrangements, total future infrastructure commitments reached $36.6 billion.
The Vera Rubin platform entered full production, including Vera CPU, Rubin GPU, Spectrum-6 switching system, and BlueField-4 DPU. Huang called Vera 'the first CPU designed for AI agents.' Additionally, Nvidia partnered with financial institutions like Apollo, Blackstone, and KKR to mobilize over $500 billion in third-party capital through an independent compute financing platform, allowing customers to acquire hardware via financing rather than upfront payments.
This model has sparked 'circular financing' discussions, questioning whether AI infrastructure returns are meeting expectations. However, Kress responded that these enterprise customers are 'once-in-a-century companies' with leading technology and rapidly growing demand, and they will become some of the largest tech companies in history.
Q2 gross margin remained at 75%, but Q3 revenue is expected to be $108 billion (plus or minus 2%), with gross margin of 74%, a slight decline due to new product cost structure and capacity ramp-up. Nvidia is approaching the milestone of $100 billion in quarterly revenue.
In shareholder returns, Nvidia returned approximately $26 billion through buybacks and dividends in Q2, with about $99 billion remaining in buyback authorization at quarter-end.
The earnings report showed that Hopper series data center product shipments to China accounted for less than 1% of data center revenue, so the outlook excludes China data center compute revenue. This reflects the geopolitical impact on Nvidia's business.
Despite orders and outlook showing no slowdown in growth, whether compute demand can sustain and whether customer investment returns will materialize remain key market concerns.
This article is based on DeepTech's coverage of Nvidia's earnings report; all data is from that report and has not been verified against the original financial statements. Some content (such as 'circular financing' concerns) is discussion mentioned in the report and attributed to the source.
Nvidia's earnings show strong AI compute demand, but slight gross margin decline, shrinking China business, and financing model controversy suggest structural risks behind high growth.
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