NVIDIA had another monster quarter on August 26. Revenue came in at $96.2 billion, up 106% from a year ago and about $4 billion above expectations. Adjusted EPS was $2.22, also ahead of estimates, while data center revenue jumped 117% to $89 billion. And NVIDIA is not slowing down just yet — it expects about $108 billion of revenue next quarter.
It’s hard to look at those numbers and not be impressed. But there’s more to NVIDIA underneath all of that. A $96 billion quarter doesn’t tell the whole story. The headline numbers are huge, but what’s really interesting is what they tell us about the AI spending cycle, NVIDIA’s growth from here, and how much longer the company can keep this pace.
NVIDIA earnings beat expectations — and then some.
At this point, NVIDIA beating estimates isn’t exactly news. The interesting part is how much it beat them by, and whether it can keep doing that.
This quarter, it did. Revenue came in more than $4 billion above expectations, and management still expects growth of around 70% in fiscal 2028. Think about that for a second. We’re talking about a company already doing almost $100 billion in revenue every three months, and it’s still talking about 70% growth.
That’s a pretty high bar for anyone to clear.
Interestingly, everyone already knew NVIDIA would have a good quarter. I
n fact, the stock had actually fallen in the days leading up to the earnings announcement as investors worried that the market had already priced that in. Then NVIDIA beat expectations — and apparently beat expectations for “beating expectations” too. The stock jumped 8.7% the next day.
Jensen Huang: “Now, compute is revenue.”
If there were concerns that the big cloud companies might start slowing down their AI spending, NVIDIA’s results didn’t really help that argument. Data center revenue more than doubled again, and management continues to describe demand as being well ahead of supply. Jensen Huang was particularly direct, saying the company is seeing demand for its systems “far in excess” of supply. The hyperscalers are still spending heavily on AI infrastructure, which means the AI capex story doesn’t look like it’s running out of steam yet.
Of course, at some point investors will ask the other side of the question. The market isn’t only concerned with how much more these companies will spend on AI. How all of that spending actually turns into revenue is truly the ultimate question.
And Jensen Huang had a pretty simple answer: “Now, compute is revenue.”
Now watch the NVIDIA margins.
NVIDIA’s gross margin was still around 75% this quarter, but management expects it to come down to about 74% next quarter and potentially bottom around 71%–72% in Q4. The main culprit is memory. Management said memory prices have risen much more than expected, creating some “extreme pricing conditions.”
But there’s an interesting twist here. NVIDIA sees the memory shortage as partly a result of the same AI boom driving its growth. In other words, AI demand is creating more demand for NVIDIA’s products, but it’s also creating some of the cost pressure around them.
NVIDIA is working with the major memory suppliers to add capacity and plans to raise prices beginning in fiscal 2028 to help offset some of those costs. Management expects margins to settle around 72%–73% eventually.
So maybe the next question isn’t just how many chips NVIDIA can sell. It’s how much money it can make on each one — and how much pricing power it can keep as the AI buildout gets even bigger.
The Death Star is still flying!
If you’ve been following our earlier commentaries, you might remember that we called NVIDIA the Death Star. Now the Death Star is doing $96 billion a quarter, growing more than 100% YOY — and already talking about another 70% growth in fiscal 2028!
Sounds like we all have to live another quarter under the Death Star’s shadow, where its earnings don’t just move “NVIDIA” itself. They can move semiconductor stocks, AI infrastructure, memory, networking, power, data centers — and increasingly, companies and industries well beyond the chip world.
The interesting part now is whether it can keep flying at this speed. The AI story is clearly still going, but as NVIDIA gets bigger, the expectations get bigger too. At some point, the market will care less about whether NVIDIA is growing and more about whether it can keep growing this much while keeping those margins intact.