Nvidia shares climbed in after-hours trading following the company’s latest quarterly earnings report, with investors showing strong confidence in the chipmaker’s continued dominance in the artificial intelligence (AI) sector.
The world’s most valuable company delivered another exceptional financial performance, exceeding Wall Street expectations and providing an optimistic outlook for future growth.
During Wednesday’s regular trading session, Nvidia shares closed down 1.59% at US$209.66. However, the stock quickly reversed direction after the earnings announcement, rising more than 4% in after-hours trading to around US$219.53.
While the company’s quarterly results were already impressive, investors were particularly encouraged by management’s long-term expectations for continued AI infrastructure demand.
Record Revenue Driven by AI Chip Demand
Nvidia reported second-quarter revenue of US$96.2 billion, representing an 18% increase from the previous quarter and more than doubling compared with the same period last year.
The result significantly exceeded analyst expectations, which were around US$92.3 billion.
Adjusted earnings reached US$2.22 per share, also beating forecasts of approximately US$2.09 per share.
The company’s Data Centre division remained the main growth engine, generating US$89 billion in revenue during the quarter. The segment recorded annual growth of 117% and contributed more than 90% of Nvidia’s total revenue.
Nvidia CEO Jensen Huang said AI technology has entered a major growth phase, with demand accelerating as AI research companies, cloud providers and businesses continue investing heavily in advanced computing infrastructure.
The company also confirmed that its next-generation Vera Rubin AI platform has entered full production, with major cloud customers already testing and deploying the technology.
During the quarter, Nvidia returned approximately US$26 billion to shareholders through stock buybacks and dividend payments.
Future Growth Forecast Fuels Investor Confidence
The biggest surprise for investors came from Nvidia’s forward outlook.
Company executives indicated that revenue could grow by around 70% by fiscal 2028, significantly above the approximately 45% growth rate previously expected by analysts.
The company also revealed that demand for its AI chips remains much higher than current supply capacity. Nvidia estimates it can currently satisfy only about 70% of customer demand, highlighting the continued shortage of advanced AI processors.
Market analysts said the forecast demonstrates strong confidence in the long-term strength of AI chip demand.
Growing revenue from enterprise customers, government-backed AI projects and specialised cloud providers is also helping Nvidia expand beyond traditional technology companies.
Following the announcement, investors pushed Nvidia shares higher, reflecting optimism about the company’s future growth potential.
Strong Near-Term Outlook
Nvidia also provided a positive forecast for the upcoming quarter, expecting revenue of approximately US$108 billion.
That projection is above Wall Street expectations of around US$104 billion, further strengthening investor confidence.
However, the company warned that profit margins could face some pressure in the short term.
Gross margins are expected to decline slightly from around 75% to approximately 74% due to rising memory and component costs. Nvidia expects margins could decrease further later in the year before recovering.
What Investors Should Watch Next
Although Nvidia continues to benefit from the global AI boom, investors will closely monitor several key factors, including supply availability, production capacity and profit margins.
The company’s ability to maintain its leadership position in AI chips while meeting rapidly increasing customer demand will likely remain the biggest focus for shareholders.
For now, Nvidia’s latest earnings report has reinforced investor confidence that the company remains one of the biggest beneficiaries of the global artificial intelligence revolution.
