Overview
Since the Report + 4.1%
Revenue grew 106.0% year over year, EPS beat the estimate by 4.3%; the stock fell 1.2% in its first reaction.
- RevenueQ2
- $96.22B
- ▲ 106% YoY · 2.8% Above Estimate
- Data Center Revenue
- $89.0B
- ▲ 117% YoY · 3.7% Above Estimate
Verdict
BUYNVIDIA's second-quarter revenue more than doubled to $96.22 billion, the data center platform alone reached $89.0 billion, and third-quarter guidance of $108.0 billion came in 3.8% above the market estimate. The stock still fell 1.19% in after-hours trading, which would make this the fifth decline after the fifth straight quarter of beating expectations. Two caveats sit inside the numbers: the gross margin outlook was cut from 75.0% to 74.0%, and free cash flow fell from $48.6 billion to $21.3 billion while revenue doubled.
Close on Report DayAug 26
$209.66▼ 1.2%Report-Day Move
- Market Cap(Today)
- ≈ $5.26 T
- 1Y Return(At Report)
- + 17%
- P/E(At Today's Price · $7.01 · Trailing 12M)
- 31.1
- Net Margin(Trailing 12M)
- 63.7%
Earnings Summary
In 30 Seconds- NVIDIA beat Q2 estimates with $96.22B revenue, up 2.8% over expectations, and $2.22 adjusted EPS, a 4.3% beat.
- Q3 revenue guidance of $108B tops the market estimate by 3.8%, but gross margin guidance is one point lower.
- The stock slipped 1.2% after hours on the softer margin outlook and a 56% drop in free cash flow.
The Numbers
Adjusted EPS
$2.22
Estimate $2.13 · Beat by 4.3%
Free Cash Flow
$21.3B
Prior Quarter $48.6B · ▼ 56%
Q3 Revenue Guidance
$108.0B
± 2% · 3.8% Above Estimate
Stock Reaction
−1.19%
After Hours · $207.16
Quarterly Revenue ($ Billion)
46.74
Q2 FY26 · $46.7 B
57.01
Q3 FY26 · $57.0 B · QoQ + 22.0%
68.13
Q4 FY26 · $68.1 B · QoQ + 19.5%
81.62
Q1 FY27 · $81.6 B · QoQ + 19.8%
96.22
Q2 FY27 · $96.2 B · QoQ + 17.9% · YoY + 105.9%
105.8–110.2
Q3 FY27 · 105.8–110.2 · QoQ + 12.2% · YoY + 89.4%
- Q2 FY26
- Q3 FY26
- Q4 FY26
- Q1 FY27
- Q2 FY27
- Q3 FY27
Q3 FY27 Company Guidance
- Revenue105.8 – 110.2 B $105.8 B $110.2 B $
Midpoint 108.0 · Estimate 104.03.8% Above Estimate ▲
- Gross Margin (Adjusted)73.5% – 74.5%73.5%74.5%73.5% – 74.5%
75.0% in Q2 · Down From a Record1.0 Point Lower ▼
- Operating Expenses (Adjusted)9 B $
$8.23B in Q2▲ 9.3% Sequentially
- China Data Center Revenue0 B $
Second Quarter in a RowAssumed Zero
- Tax Rate16% – 18%16%18%
GAAP and AdjustedUnchanged
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±6.8% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Data Center$89.0 BShare 92.5%▲ 117.0% YoY
- Edge Computing$7.20 BShare 7.5%▲ 27.0% YoY
Key Metrics
Operating Cash Flow
$24.1 B
▲ 57.0% YoYPress Release
Share Repurchases
$19.7 B
▲ 103.0% YoYPress Release
Dividends Paid
$6.05 B
Press Release
Remaining Buyback Authorization
$99.0 B
Press Release
Inventory
$31.6 B
Press Release
Shares are computed over the segment total: $96.2 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue. This time last year, one lab alone was driving the buildout; today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online.”
- Revenue Doubled in a Year
- Vera Rubin in Full Production
- Demand Spread Beyond One Customer
Summary and Review
Summary
For the quarter ended July 26, 2026, NVIDIA reported revenue of $96.22 billion, up 106% year over year and 17.9% sequentially. The company doubled its revenue in a single year. The data center platform grew 117% to $89.0 billion, made up 92.5% of total revenue and beat the $85.8 billion market estimate. Edge computing rose 27% to $7.2 billion. Adjusted earnings were $2.22 a share, 4.3% above the $2.13 estimate. Adjusted gross margin held flat at 75.0% sequentially.
Every line and the guide beat. The stock fell to $207.16 after hours, down 1.19%. It had closed down 1.59% at $209.66 after a seven-session losing streak. The pattern holds: shares fell after each of the last four reports, by 1.8%, 5.5%, 3.2% and 0.8%. Two lines caught investors. First, third-quarter gross margin guidance of 74.0%, a point below this quarter's 75.0%, on memory cost. Second, cash: revenue doubled while cash from operations fell from $50.3 billion to $24.1 billion.
We score the quarter 84, grading the earnings report, not the stock. Revenue, earnings, data center and guidance beat, off an $81.6 billion base. Two items pull the score from 88 to 84: the cash-generation drop and the lower margin outlook. Both share one cause: NVIDIA sells racks, not chips, and buys the memory inside them months before collecting revenue. On valuation, the stock trades at roughly 30 times trailing earnings; the average analyst target is $305.79.
Full Review
Revenue Doubled in a Year; Scale Is Now the Story.
Quarterly revenue of $96.22 billion is more than double the $46.74 billion of a year ago. Growth of 106% at this size is not an ordinary outcome: NVIDIA now books more revenue in one quarter than it did in an entire fiscal year three years ago. The data center platform grew 117% to $89.0 billion and accounted for 92.5% of the total; edge computing grew 27% to $7.2 billion but still represents only 7.5%. The company is effectively a single-line business now: whatever the data center does, NVIDIA does. The data center figure also beat the $85.8 billion market estimate by $3.2 billion, and the place where the estimate was beaten is the place where the story is.
GAAP Earnings Ran Higher on a $7.77 Billion Equity Gain.
This is the most easily misread line of the quarter. GAAP earnings were $2.46 a share against adjusted earnings of $2.22, so the GAAP number is the higher one, which is not the usual arrangement at NVIDIA. The gap comes from a $7.77 billion valuation gain on equity securities the company holds. That money never entered the bank: the shares in NVIDIA's portfolio rose in price, and accounting rules put the change straight into net income. Because the rule is symmetric, the same line works in reverse if those holdings fall. The point is simple: if you want to see what the company earned selling chips, the number to read is $2.22, not $2.46. Market estimates are built on the adjusted figure, which is why the surprise is 4.3%.
Revenue Doubled and Free Cash Flow More Than Halved.
Cash from operations fell to $24.1 billion from $50.3 billion in the prior quarter. With capital expenditure of $2.68 billion, free cash flow came to $21.3 billion, against $48.6 billion three months earlier. As a ratio the gap is starker: last quarter 59.5% of revenue converted to cash, this quarter 22.2% did. Profit did not fall; it rose. What changed is where the money sits. Inventories climbed $5.8 billion in a quarter, from $25.8 billion to $31.6 billion. The cause is a change in what NVIDIA sells: not individual chips but rack-scale systems containing memory, networking hardware and cooling. Every component in that rack is purchased months before the system ships and the invoice is collected, and the cash stays locked in inventory throughout. Growth itself consumes cash. This is not a bad quarter; it is a different business model.
Vera Rubin Is in Full Production; AWS Booked 2 Million More.
The Vera Rubin platform has entered full production, with racks running at CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius. Last quarter that was still on the calendar; now it is in the revenue. A same-day announcement shows how far forward demand is booked. AWS said it will deploy 2 million more Blackwell Ultra, Rubin and Rubin Ultra GPUs across 2027 and 2028. AWS had already pledged more than 1 million chips at GTC in March, and NVIDIA says demand has exceeded that plan. The package also includes 100,000 GPUs set aside for federal and national-security workloads. On the call, Jensen Huang said demand has moved beyond a single lab to multiple frontier labs, startups and an open-model ecosystem. That is a direct answer to the customer-concentration question investors have asked for years. The answer is still the company's assertion, not an audited breakdown.
Guidance Is $108 Billion; Margin Down a Point, No China.
Guided revenue is $108.0 billion, plus or minus 2%: $105.8 billion to $110.2 billion. The market estimate was near $104 billion; the midpoint is 3.8% above it. The outlook again assumes zero data center revenue from China. Adjusted gross margin is guided to 74.0%, plus or minus 50 basis points, a full point below this quarter's 75.0%. The cause is one link up the supply chain: AI-server demand has pushed HBM and DRAM prices higher. NVIDIA created that shortage, but it also buys the memory when it sells a rack. Still, 75.0% is a record, 2.6 points above the 72.5% of a year ago. So 74.0% is a step down from a record, not weakness. One point on a $108 billion quarter is roughly $1.1 billion of gross profit. In November, watch two lines: whether gross margin holds 74.0%, and whether revenue lands at the $108 billion midpoint.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- Revenue reached $96.22 billion and doubled in a year, up 106% from a year ago and 17.9% sequentially.
- Data center revenue grew 117% to $89.0 billion, beating the $85.8 billion market estimate by $3.2 billion.
- Adjusted earnings of $2.22 a share beat the estimate by 4.3%Adjusted gross margin held flat at 75.0%.
- Third-quarter revenue guidance of $108 billion came in 3.8% above the market estimate.
- AWS committed the same day to 2 million more GPUs for 2027-2028, having already exceeded its 1 million pledge from March.
- The company returned $26.0 billion through buybacks and dividends, with $99.0 billion of authorization still unused.
Risks
6- Free cash flow fell from $48.6 billion to $21.3 billionThe share of revenue converting to cash dropped from 59.5% to 22.2%.
- Third-quarter gross margin guidance was cut to 74.0%, a full point below the 75.0% delivered this quarter, on memory costs.
- Inventories rose from $25.8 billion to $31.6 billion in one quarterWrite-downs have occurred once before during an architecture transition.
- $7.77 billion of GAAP earnings came from revaluing equity holdings, a line that never reached the bank and reverses if markets turn.
- Most data center revenue comes from a few hyperscalers, all developing their own acceleratorsThe company says demand has broadened but publishes no customer breakdown.
- Shares fell the day after each of the last four reportsThe bar is so high that a clean beat can still send them down.
What to Watch
6- November 2026 - fiscal third-quarter results: the test of the $108 billion outlook, the 74.0% margin and the no-China scenario.
- November 2026 - the first full quarter with Vera Rubin in full production; yield and logistics problems are routine in new architecture ramps.
- 2027-2028 - the deployment schedule for the 2 million GPUs AWS has committed to, and how many quarters it spans.
- October 1, 2026 - payment of the $0.25 quarterly dividend.
- Late 2026 - whether any revenue is recognized on shipments to China; guidance assumes zero, so this counts as upside.
- February 2027 - fiscal fourth-quarter and full-year 2027 results: the first real accounting of the $1 trillion Blackwell and Rubin order target.
Upcoming Earnings
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