Nvidia Corporation expects third-quarter revenue to come in above Wall Street expectations, signalling that demand for its artificial intelligence (AI) chips remains strong despite growing competition and uncertainty surrounding its China business.
The chipmaker forecast third-quarter revenue of US$108 billion, plus or minus 2%, compared with analysts’ average estimate of US$104.19 billion, according to LSEG data.
Nvidia’s second-quarter revenue more than doubled to US$96.22 billion for the three months ended 26 July 2026, beating analysts’ expectations of US$92.17 billion. Adjusted earnings came in at US$2.22 per share, above the US$2.10 expected.
Data centre revenue, Nvidia’s key business segment, also more than doubled to US$89 billion, exceeding the US$85.08 billion estimate.
The company also expects revenue to grow by about 70% in fiscal 2028, reinforcing expectations that AI infrastructure spending will remain a major growth driver.
Nvidia also announced an expanded partnership with Amazon Web Services, with the two companies planning to deploy an additional two million Nvidia GPUs across Amazon’s global infrastructure in 2027 and 2028.
Following the results, Nvidia shares rose more than 4% in after-hours trading as investors responded positively to the company’s growth outlook. The stock had gained 12.4% year-to-date as of Wednesday’s close.
However, Nvidia faces several challenges ahead, including rising competition from custom AI chips and central processors designed for inference workloads. Major technology companies including Meta and Alphabet are increasing their investments in in-house or alternative chip solutions to reduce reliance on Nvidia.
Nvidia also said its third-quarter outlook does not assume any data centre chip sales to China, highlighting continued uncertainty surrounding US export restrictions and the company’s access to the Chinese market.
The company expects adjusted gross margin of 74%, plus or minus 50 basis points, in the third quarter, slightly below analysts’ expectation of 74.77%.
Despite the challenges, Nvidia continues to dominate the AI chip market, with the company previously estimating that the revenue opportunity for its AI chips could exceed US$1 trillion through 2027.
The latest results come as Big Tech companies are expected to spend more than US$730 billion on AI infrastructure this year, significantly above the estimated US$400 billion spent in 2025.
Reuters
