Nvidia projects 70% revenue surge, signals AI boom far from over
Nvidia forecasts 70% revenue growth next fiscal year, easing fears of an AI spending slowdown.
Nvidia on Wednesday projected a 70% jump in revenue for its next fiscal year, a rare long-term outlook that signals the artificial intelligence computing boom still has room to run. The forecast, which far exceeded Wall Street's average estimate of 44% growth, helped lift the company's shares nearly 5% in extended trading.
"AI has reached its inflection point," Chief Executive Jensen Huang said on an earnings call. "Now, compute is revenue." The company's guidance is likely to reassure investors who have questioned how long the AI spending surge can last after years of explosive growth.
The chipmaker said demand is broadening beyond the largest cloud providers to include AI labs, enterprises, sovereign buyers, and industrial customers. It expects AI labs to contribute roughly a quarter of its business next year. The so-called neo-clouds, including Nebius and CoreWeave, are set to exit this year with more than eight gigawatts of Nvidia GPU capacity, up from three gigawatts at the end of last year.
Nvidia also announced an expanded partnership with Amazon Web Services to deploy an additional 2 million GPUs across Amazon's global infrastructure in 2027 and 2028.
Despite the strong demand, supply constraints continue to limit growth. Chief Financial Officer Colette Kress said memory component shortages and higher costs would pressure margins, which are expected to bottom at roughly 71% to 72% in the fourth quarter, down from about 74% in the third quarter.
For the current quarter ending in October, Nvidia forecast revenue of $108 billion, plus or minus 2%, compared with analysts' average estimate of $104.19 billion. The company's Vera Rubin platform, which has started shipping, will account for about a fifth of data center revenue in that period.
In the fiscal second quarter ended July, revenue more than doubled to $96.22 billion, beating estimates of $92.17 billion. Data center revenue alone rose to $89 billion, above the expected $85.08 billion. Adjusted profit came in at $2.22 per share, versus the $2.10 estimate.
Nvidia's China business remains uncertain. Washington cleared roughly ten Chinese firms, including Alibaba, Tencent, and ByteDance, to buy its H200 chip in May, but deliveries have been slow. Nvidia did not include China data center revenue in its outlook.