The Zhitong Finance App learned that against the backdrop of continued explosion in demand for artificial intelligence (AI) computing power, the latest quarterly results announced by Nvidia (NVDA.US) once again proved its unshakable dominance in the AI chip field with figures far exceeding market expectations. What shocked Wall Street even more was that the company's revenue guidance for the full year of FY2028 was nearly $200 billion higher than the market consensus. This directly boosted its stock price by nearly 7% in the premarket, and prompted many analysts to raise their target share prices one after another.
According to the data, for the quarter ending July 2026 (the second quarter of the company's fiscal year), Nvidia achieved revenue of 96.2 billion US dollars, an increase of 106% over the previous year, far exceeding Wall Street's expectations of about 92 billion US dollars. Net profit reached US$59.69 billion, or US$2.46 per share. Net profit for the same period last year was US$26.42 billion, with earnings per share of US$1.08, an increase of more than 125%. The gross margin remained high at 75%, but it was slightly below the level previously anticipated by the market.
Looking at the business structure, the data center business is still the absolute main force, with revenue reaching 89 billion US dollars in a single quarter, an increase of 117% over the previous year. The company said demand for the Blackwell Ultra platform continued to be strong, and revenue from sovereign AI, AI-native enterprises and enterprise customers all increased significantly. Additionally, edge computing business revenue was $7.2 billion, up 13% month-on-month and 27% year-over-year. Operating expenses rose 55% year over year to US$8.41 billion, reflecting the company's continued high investment in R&D and market expansion.
Nvidia founder and CEO Hwang In-hoon said in the earnings report: “AI has reached an inflection point. It is doing useful work, and tokens have become productive and profitable. Now, computing power itself is income.” He further pointed out that the AI infrastructure expansion is “running at full speed,” the next-generation Vera Rubin platform has been fully put into operation, and the fastest product climbing speed in the company's history.
For the current quarter (August to October), Nvidia gave revenue guidance of about US$108 billion, higher than analysts' expectations of US$103.9 billion, an increase of about 89% over the previous year. At the same time, the company expects gross margin of about 74% for the quarter, slightly lower than Wall Street's estimate of 75%, which is mainly affected by the product portfolio and initial climbing costs.
What really boils the market is the company's full-year outlook for the 2028 fiscal year. Nvidia CFO Colette Kress (Colette Kress) said in a conference call that the company expects revenue for the 2028 fiscal year to increase 70% year over year compared to the previous Wall Street consensus forecast of only 44%. More importantly, Kress stressed that this 70% growth level is still limited by supply, and the actual demand growth rate exceeds three digits. Based on the 2027 fiscal year revenue of about 396 billion US dollars, the 2028 fiscal year revenue will reach about 673 billion US dollars. This figure will surpass Apple (AAPL.US) and Alphabet (GOOGL.US), and become the second-highest grossing technology company in the world after Amazon (AMZN.US).
New financial estimates shock Wall Street Nvidia staged a “back to the future” style counterattack
Jefferies analyst Blayne Curtis (Blayne Curtis) directly quoted the classic “Star Wars” title in his report, and even called this guide “The Emperor Strikes Back” (The Emperor Strikes Back) to describe Nvidia's astonishing performance guidelines.
He pointed out, “The key point of this financial report is a guide to a 70% increase in revenue for the full year of FY2028, while Wall Street's forecast was only 44%, corresponding to $700 billion in revenue. The consensus was only 570 billion US dollars, which is 200 billion US dollars higher than the previous $1 trillion Blackwell and Rubin framework. 70% growth is just the bottom line, and unconstrained demand is close to 100%. Based on this foundation, we clearly see the path to reaching $1 trillion in revenue in fiscal year 2029, which is an amazing figure for a company of this size.” Curtis maintains Nvidia's “buy” rating with a target price of $300.
Other agencies also don't skimp on good words; Evercore ISI is one of them.
Evercore ISI analyst Mark Lipacis (Mark Lipacis) raised the target price sharply from $413 to $465, maintaining an “outperforming market” rating. He believes that the upward revenue outlook is enough to offset the impact of the reduction in gross margin guidelines (72% to 73% in the 2027 calendar year, previously in the mid-70% range) and the company's $160 billion guarantee and commitment to help customers obtain land, electricity, and chassis capacity.
Lipasis wrote, “We think Nvidia has two catalysts: one is to enter a positive capital return cycle, and the other is the possibility of stabilizing or even increasing its market share in 2027. At a valuation of 13 times our earnings per share forecast for the calendar year 2027, Nvidia has one of the most attractive risk-reward ratios in our coverage area.”
Bank of America analyst Vivek Arya (Vivek Arya) reiterated Nvidia's preferred stock and “buy” ratings, arguing that management showed a “compelling vision” — including guidance, off-balance sheet disclosures and supply conditions, and a temporary decline in gross margin — which should keep the questioners quiet for a while. “The management clearly demonstrated how strategic investments can help Nvidia solidify its dominant position in the 'once in a generation' AI construction wave. This vision is compelling,” Alia wrote in the report.
J.P. Morgan raised the target price from $280 to $320, maintaining an “overweight” rating. The bank pointed out that data center growth is accelerating, demand for Blackwell Ultra is strong, and the Vera Rubin platform has already begun shipping and has received purchase orders from major hyperscale cloud vendors, AI cloud providers, and system OEMs. The company says this is the fastest product climb in its history. J.P. Morgan expects gross margin to bottom out in the fourth quarter of FY2027 and then recover in FY2028, and the gross margin outlook for FY2028 is supported by HBM supply commitments — the company has locked in HBM supply at known prices for most of the demand.
Mizuho raised its target price from $300 to $315, maintaining an “outperforming market” rating. The bank expects revenue for the 2028 fiscal year to reach about 700 billion US dollars, an increase of more than 70% over the previous year, far higher than the current consensus of 574 billion US dollars. Mizuho also expects Blackwell Ultra to continue climbing, and Vera Rubin may contribute about 20% of revenue in the October quarter. In terms of gross margin, it is expected to fall to about 74% in the October quarter, down 100 basis points from month to month, reach a low of 71%-72% in the January quarter, and then stabilize at 72%-73% in the 2028 fiscal year. The target price of $315 is based on a price-earnings ratio of approximately 20 times the profit for fiscal year 2028.
Goldman Sachs raised its price target from $285 to $300, but maintained a “neutral” rating. Analyst James Schneider (James Schneider) believes that under the strong outlook for the 2027 calendar year, the stock price is expected to maintain recent increases, but the stock price may fluctuate in a range between guidance that exceeds expectations and already high market expectations. In particular, he pointed out that management promised to return more than 50% of the excess cash flow to shareholders, which may provide additional support for stock prices. Furthermore, the mid-term gross margin guidance of 72%-73% for the 2027 calendar year helps ease investors' concerns about rising investment costs, while more transparent disclosure of clients' financial guarantees and commitments can also help investors better assess potential financial risks.
Options Market: One-month target is $260
The options market was also very lively after the earnings report was released. According to options trading data, before Nvidia's earnings report, the implied fluctuation in options market pricing was about ± 6.1%, while the 7% increase before Thursday almost accurately fell within this forecast range.
As the dust settled on earnings trading, the market's attention quickly turned to the options chain due on September 25. The implied volatility of this options chain shows that the market expects Nvidia to fluctuate around ± 10.1% within a month, and the corresponding price range is about $202 to $247 (in pre-market prices).
What is really remarkable, however, is the distribution of positions in the call options. The execution price of the $260 call option reached 31,842, making it the largest single position in the entire options chain, about 15.7% higher than Thursday's pre-market price. This means that a significant number of traders had already targeted the $260 line before the earnings report was released. The $250 call option position volume was 28,914, $240 was 25,731, and $230 was 22,619, showing a tiered bullish pattern from low to high, extending to 15,847 positions for the $300 call option — the latter was approximately 33% higher than the pre-market price. Since the $260 call option has far exceeded the fluctuation range implied by the September 25 weight chain, traders holding these contracts are clearly betting on a continuation of momentum rather than a slow drift after the earnings report.
In terms of downside protection, the $200 put option became the largest bearish contract with 24,107 positions, which is about 11% lower than the pre-market price. This position is seen as a key line of defense for “the bullish logic begins to unravel after the earnings report.” Downwards, the exercise prices of $195, $190, $185, and $180 formed a protective ladder, while 18,847 positions in the $170 put option were used by traders as a hedge against extreme tail risk.
The only bearish voice: Seaport believes “sell-out” limits upside
Amid a bullish wave, Seaport Research Partners analyst Jay Goldberg (Jay Goldberg) became the only analyst on Wall Street to maintain a “sell” rating. In an interview after Nvidia's earnings report was released, he said that although the chip giant's quarterly performance was “very impressive,” “no one will care” because the company's chips are already sold out, and limited supply means there is almost no room to exceed expectations this year.
Goldberg pointed out that Nvidia's dependence on TSM.US is a constraint that will be difficult to ease in the short term. He believes that Nvidia's chip production capacity allocation has been fully locked within this year. “When your products are sold out, where do you get the upside? This is not going to change this year.” In particular, he pointed out that Nvidia's dependence on TSMC is a structural constraint that cannot be mitigated in the short term.
He also mentioned that Groq, acquired by Nvidia, may increase production outside of TSMC next year, and that software and new cloud business revenue may also bring additional growth, but these will take time.
Additionally, he highlighted competitive threats from AMD (AMD.US) Instinct chips, Google's TPU, and self-developed chips from OpenAI and Anthropic. Despite this, he expects Nvidia to maintain the largest share of the market.