◆ Inside the Latest Quarter (Q2 FY2027)

Nvidia (NVDA) — the variant view

$96.2 billion in a single quarter with China still switched off — and the CFO told the market its fiscal-2028 estimates were about twenty-six points too low.

📈 NVDA valuation, revenue & earnings — P/E, P/S, revenue, EPS →

Nvidia's fiscal second quarter of 2027, reported on 26 August 2026, is best understood through a number that would have read as a typo three years ago: revenue of $96.2 billion in a single quarter, up 106% from a year earlier and 18% from the quarter before1. Data-center revenue, the heart of the AI build-out, reached $89.0 billion — up 117% — and is now roughly nine dollars in every ten the company collects2. Gross margin held at 75.0%, and operating income of $63.7 billion means Nvidia converted about two-thirds of every dollar of sales into operating profit3. It did all of this with China effectively switched off by export control — Hopper shipments there came to less than one percent of data-center revenue4.

Q2 FY2027$96.2Brevenue, +106%$89.0BData Center, +117%$108BQ3 guide, no China$279Bpurchasecommitments,from $119BGross margin 75.0%, guided to 74.0% next quarter - memory prices taking the first bite.
A quarter that beat its own guide, guided the next one higher, and still assumes nothing from China.

The guide is the louder half of the report. Management pointed the third quarter at $108.0 billion, again with no China data-center compute in the number5, and the chief financial officer told investors on the call to expect revenue growth of about 70% in fiscal 2028 — against an average analyst estimate nearer 44%6. A company this size does not usually tell the market its forecasts are too low. Behind the guide sits a commitment: purchase obligations, mostly for memory, rose from $119 billion at the end of last quarter to $279 billion7. That is not a forecast, it is money Nvidia has agreed to spend.

And yet the stock keeps getting cheaper on its own numbers. At the height of the AI euphoria Nvidia traded near eighty times earnings; a quarter ago it was near thirty-two; it is now close to twenty-six trailing and around eighteen on the year ahead8. That is the mirror image of the usual bubble worry — the earnings have compounded faster than the price for eight straight quarters, so the multiple keeps falling while the business roars.

Two things in the release deserve more attention than they will get. The first is that gross margin is guided down to 74.0% next quarter, and the reason is the price of memory9 — the first time in this cycle that a supplier, rather than a competitor or a regulator, has taken a visible bite out of Nvidia's economics. The second is that GAAP earnings per share, $2.46, now exceed the non-GAAP $2.22, because from this year Nvidia stopped excluding stock compensation from its adjusted figures10. Most companies' adjusted numbers flatter them; Nvidia's now understate.

So does the quarter change the moat? No — it stress-tests it again, and the moat holds. What an owner should watch is not the growth, which is spectacular, but the two things that decide whether this is a franchise or the best seat in a boom: the durability of the CUDA lock-in, and whether a customer list this concentrated stays a customer list. The memory-cost squeeze is the new item on that watchlist, and the first number to check next quarter is whether 74.0% holds.

References
  1. ReportedQ2 FY2027 revenue of $96.2 billion, up 106% year on year and 18% sequentially.
    NVIDIA, Q2 FY2027 financial results (Form 8-K, exhibit 99.1) — revenue of $96,221M for the quarter ended 26 July 2026, up 18% sequentially and 106% year on year; Data Center revenue of $89.0 billion, up 18% sequentially and 117% year on year; GAAP and non-GAAP gross margins both 75.0%, against 74.9% in Q1 FY2027 and 72.4% a year earlier; operating expenses $8,408M; operating income $63,734M, up 124%; GAAP net income $59,688M, up 126%; GAAP diluted EPS $2.46 against non-GAAP $2.22, the two having crossed because from Q1 FY2027 NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense; approximately $26.0 billion returned to shareholders in the quarter with roughly $99.0 billion remaining under the repurchase authorisation; six-month FY2027 revenue $177,837M and net income $118,010M. Outlook for Q3 FY2027: revenue of $108.0 billion plus or minus 2%, with NVIDIA not assuming any Data Center compute revenue from China; GAAP and non-GAAP gross margins of 74.0% plus or minus 50 basis points. Jensen Huang: 'AI has reached its inflection point... Vera Rubin, now in full production, was built to power exactly this moment.' — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
  2. ReportedData Center revenue of $89.0 billion, up 117% year on year — about nine dollars in every ten of company revenue.
    NVIDIA, Q2 FY2027 financial results (Form 8-K, exhibit 99.1) — revenue of $96,221M for the quarter ended 26 July 2026, up 18% sequentially and 106% year on year; Data Center revenue of $89.0 billion, up 18% sequentially and 117% year on year; GAAP and non-GAAP gross margins both 75.0%, against 74.9% in Q1 FY2027 and 72.4% a year earlier; operating expenses $8,408M; operating income $63,734M, up 124%; GAAP net income $59,688M, up 126%; GAAP diluted EPS $2.46 against non-GAAP $2.22, the two having crossed because from Q1 FY2027 NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense; approximately $26.0 billion returned to shareholders in the quarter with roughly $99.0 billion remaining under the repurchase authorisation; six-month FY2027 revenue $177,837M and net income $118,010M. Outlook for Q3 FY2027: revenue of $108.0 billion plus or minus 2%, with NVIDIA not assuming any Data Center compute revenue from China; GAAP and non-GAAP gross margins of 74.0% plus or minus 50 basis points. Jensen Huang: 'AI has reached its inflection point... Vera Rubin, now in full production, was built to power exactly this moment.' — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
  3. ReportedGross margin of 75.0% and operating income of $63.7 billion, roughly two-thirds of revenue.
    NVIDIA, Q2 FY2027 financial results (Form 8-K, exhibit 99.1) — revenue of $96,221M for the quarter ended 26 July 2026, up 18% sequentially and 106% year on year; Data Center revenue of $89.0 billion, up 18% sequentially and 117% year on year; GAAP and non-GAAP gross margins both 75.0%, against 74.9% in Q1 FY2027 and 72.4% a year earlier; operating expenses $8,408M; operating income $63,734M, up 124%; GAAP net income $59,688M, up 126%; GAAP diluted EPS $2.46 against non-GAAP $2.22, the two having crossed because from Q1 FY2027 NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense; approximately $26.0 billion returned to shareholders in the quarter with roughly $99.0 billion remaining under the repurchase authorisation; six-month FY2027 revenue $177,837M and net income $118,010M. Outlook for Q3 FY2027: revenue of $108.0 billion plus or minus 2%, with NVIDIA not assuming any Data Center compute revenue from China; GAAP and non-GAAP gross margins of 74.0% plus or minus 50 basis points. Jensen Huang: 'AI has reached its inflection point... Vera Rubin, now in full production, was built to power exactly this moment.' — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
  4. ReportedShipments of Data Center Hopper products to China were less than 1% of Data Center revenue in the quarter.
    NVIDIA Q2 FY2027 CFO commentary (Form 8-K, exhibit 99.2) — Data Center revenue of $89,023M splits into Hyperscale $48,710M (+102% year on year, +13% sequentially), AI Clouds/Industrial & Enterprise $40,313M (+138%, +25%) and Edge Computing $7,198M (+27%, +13%); shipments of Data Center Hopper products to China during the quarter were less than 1% of Data Center revenue; purchase commitments increased from $119 billion in the prior quarter to $279 billion, primarily related to the procurement of memory; segment revenue was Compute & Networking $88,299M (+114%) and Graphics $7,922M (+46%) — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
  5. ReportedQ3 FY2027 guided to $108.0 billion, with no Data Center compute revenue from China assumed.
    NVIDIA, Q2 FY2027 financial results (Form 8-K, exhibit 99.1) — revenue of $96,221M for the quarter ended 26 July 2026, up 18% sequentially and 106% year on year; Data Center revenue of $89.0 billion, up 18% sequentially and 117% year on year; GAAP and non-GAAP gross margins both 75.0%, against 74.9% in Q1 FY2027 and 72.4% a year earlier; operating expenses $8,408M; operating income $63,734M, up 124%; GAAP net income $59,688M, up 126%; GAAP diluted EPS $2.46 against non-GAAP $2.22, the two having crossed because from Q1 FY2027 NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense; approximately $26.0 billion returned to shareholders in the quarter with roughly $99.0 billion remaining under the repurchase authorisation; six-month FY2027 revenue $177,837M and net income $118,010M. Outlook for Q3 FY2027: revenue of $108.0 billion plus or minus 2%, with NVIDIA not assuming any Data Center compute revenue from China; GAAP and non-GAAP gross margins of 74.0% plus or minus 50 basis points. Jensen Huang: 'AI has reached its inflection point... Vera Rubin, now in full production, was built to power exactly this moment.' — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
  6. ReportedThe CFO guided fiscal 2028 revenue growth of about 70%, against an average analyst estimate nearer 44%.
    NVIDIA Q2 FY2027 earnings call, reported by CNBC — chief financial officer Colette Kress told investors that revenue growth in fiscal 2028 would reach about 70%, against an average analyst estimate nearer 44%; on a consensus fiscal 2027 revenue projection of roughly $396 billion that implies fiscal 2028 revenue of about $673 billion — FY2028 outlook · publ. 2026-08-26 · source ↗
  7. ReportedPurchase commitments rose from $119 billion in the prior quarter to $279 billion, primarily memory procurement.
    NVIDIA Q2 FY2027 CFO commentary (Form 8-K, exhibit 99.2) — Data Center revenue of $89,023M splits into Hyperscale $48,710M (+102% year on year, +13% sequentially), AI Clouds/Industrial & Enterprise $40,313M (+138%, +25%) and Edge Computing $7,198M (+27%, +13%); shipments of Data Center Hopper products to China during the quarter were less than 1% of Data Center revenue; purchase commitments increased from $119 billion in the prior quarter to $279 billion, primarily related to the procurement of memory; segment revenue was Compute & Networking $88,299M (+114%) and Graphics $7,922M (+46%) — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
  8. Third-party estimateAbout 26 times trailing earnings and roughly 18 times forward, against near 80 times at the 2023 peak.
    Market data for NVDA following the Q2 FY2027 report — market capitalisation of about $5.08 trillion, trailing twelve-month revenue of $302.97 billion, a trailing P/E of about 26.5 and a forward P/E of about 18.4 — August 2026 · publ. 2026-08-27 · source ↗
  9. ReportedGross margin guided down to 74.0% next quarter, on higher memory costs.
    NVIDIA, Q2 FY2027 financial results (Form 8-K, exhibit 99.1) — revenue of $96,221M for the quarter ended 26 July 2026, up 18% sequentially and 106% year on year; Data Center revenue of $89.0 billion, up 18% sequentially and 117% year on year; GAAP and non-GAAP gross margins both 75.0%, against 74.9% in Q1 FY2027 and 72.4% a year earlier; operating expenses $8,408M; operating income $63,734M, up 124%; GAAP net income $59,688M, up 126%; GAAP diluted EPS $2.46 against non-GAAP $2.22, the two having crossed because from Q1 FY2027 NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense; approximately $26.0 billion returned to shareholders in the quarter with roughly $99.0 billion remaining under the repurchase authorisation; six-month FY2027 revenue $177,837M and net income $118,010M. Outlook for Q3 FY2027: revenue of $108.0 billion plus or minus 2%, with NVIDIA not assuming any Data Center compute revenue from China; GAAP and non-GAAP gross margins of 74.0% plus or minus 50 basis points. Jensen Huang: 'AI has reached its inflection point... Vera Rubin, now in full production, was built to power exactly this moment.' — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
  10. ReportedGAAP diluted EPS of $2.46 exceeded non-GAAP $2.22, because from fiscal 2027 NVIDIA's non-GAAP measures no longer exclude stock-based compensation.
    NVIDIA, Q2 FY2027 financial results (Form 8-K, exhibit 99.1) — revenue of $96,221M for the quarter ended 26 July 2026, up 18% sequentially and 106% year on year; Data Center revenue of $89.0 billion, up 18% sequentially and 117% year on year; GAAP and non-GAAP gross margins both 75.0%, against 74.9% in Q1 FY2027 and 72.4% a year earlier; operating expenses $8,408M; operating income $63,734M, up 124%; GAAP net income $59,688M, up 126%; GAAP diluted EPS $2.46 against non-GAAP $2.22, the two having crossed because from Q1 FY2027 NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense; approximately $26.0 billion returned to shareholders in the quarter with roughly $99.0 billion remaining under the repurchase authorisation; six-month FY2027 revenue $177,837M and net income $118,010M. Outlook for Q3 FY2027: revenue of $108.0 billion plus or minus 2%, with NVIDIA not assuming any Data Center compute revenue from China; GAAP and non-GAAP gross margins of 74.0% plus or minus 50 basis points. Jensen Huang: 'AI has reached its inflection point... Vera Rubin, now in full production, was built to power exactly this moment.' — Q2 FY2027 (quarter ended 26 July 2026) · publ. 2026-08-26 · source ↗
Sources
Generated September 18, 2026