Nvidia CEO Jensen Huang did it again. The AI chip powerhouse delivered better-than-expected quarterly revenue and earnings that more than doubled the year-ago period. Business is so strong that management felt comfortable enough to provide a financial outlook further into the future than ever before. Revenue in the company’s fiscal 2027 second quarter increased 106% to $96.22 billion, outpacing the $92.165 billion consensus, according to estimates compiled by data provider LSEG. Adjusted earnings per share (EPS) increased 128% to $2.46, also exceeding the LSEG consensus estimate of $2.10. NVDA YTD mountain Nvidia YTD Shares initially fell slightly on Wednesday evening’s print, but quickly reversed course and rose more than 4% once the post-earnings conference call started and CFO Colette Kress made clear that any disappointment the buy-side may have with these results is due to capacity constraints. Given the results, it’s clear that Nvidia’s stock is, as has been the case throughout its history, cheaper than it appeared on a forward earnings basis. We’re reiterating our buy-equivalent 1 rating and raising our price target up to $280 from $260. Bottom line Demand is not simply holding in; it’s accelerating, with topline growth accelerating for the fourth quarter in a row. Still, Wall Street appears to be greatly underestimating the size of the opportunity and the pace of AI adoption. It was this realization that flipped the stock as the call got underway, with Kress saying that the team expects fiscal 2028 revenue to increase 70% versus the current fiscal year 2027. Analysts were only expecting about 45% topline growth over the stretch. This is notable because of the magnitude of the upside in the forecast, and it’s the first time the team has ever guided a year in advance. That speaks volumes about the confidence the company has in its ability to make good on its forecasts. During the Q & A session, CEO Jensen Huang said, “Even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%. And we’re going to continue to work with our supply chain to increase on that.” The gross margin outlook was a bit lower than expected, with Kress attributing the crunch to the relentless rise in memory prices, both for the remainder of this fiscal year and for fiscal 2028. The CFO expects memory prices to be even higher into next year — a negative for most companies but a boon to fellow Club name Micron, which saw its stock jump more than 3.5% in after-hours trading. Nvidia’s revenue upside, however, stands to more than make up for the memory squeeze. Come morning, expect a deluge of analysts to upwardly revise their earnings estimates. In addition to the results, Nvidia announced an expansion of its partnership with Amazon ‘s cloud unit. The expansion will see Amazon Web Services (AWS) deploy 2 million additional Nvidia graphics processing units (GPUs) in fiscal years 2027 and 2028. AWS will also install Vera central…
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