Nvidia’s blowout earnings come with a fine print worth reading

Nvidia just posted numbers that most companies would consider a career highlight, not a quarterly routine. Revenue hit $96.2 billion in Q2 fiscal 2027, up 106% from the same period a year ago. Net income reached $59.69 billion, a 126% year-over-year jump. The data center segment generated $89 billion in revenue, up 117% year-over-year, as hyperscalers and enterprises race to build AI infrastructure. Demand for Nvidia’s chips is so intense that the company’s own Q3 guidance of roughly $108 billion in revenue is described as supply-constrained. The company projects approximately 70% revenue growth for fiscal 2028. Wall Street’s consensus heading into the print was around 45%. CEO Jensen Huang described AI’s growth trajectory as having reached an inflection point, arguing that compute resources are now producing meaningfully higher revenue productivity than before. Gross margin came in at 75% for the quarter. Nvidia guided margin down to approximately 74% for Q3, with some projections suggesting a further slide to the 71-72% range in subsequent quarters. Rising memory costs are the primary culprit. Nvidia has committed up to $105 billion in guarantees tied to an OpenAI data center lea...