Nvidia Key Comments From 2nd quarter earnings call

Supply Chain

Nvidia CFO Colette Kress: “Looking ahead, our preliminary expectation is for fiscal year 2028 revenue to grow approximately 70% year-over-year. Although we will work to close the supply-demand gap, we expect supply to remain a bottleneck at least through the end of fiscal year 28.”

(Analysts expected 44% for fiscal 2028. Nvidia’s Fiscal 2028 starts Feb. 1, 2027, and ends Jan. 31, 2028)

Nvidia CEO Jensen Huang: “Incredibly, we are seeing demand acceleration even at our scale. Customers’ forecasts point to our growth doubling next year. However, as mentioned earlier, we expect to grow approximately 70% as we are supply constrained.”

CFO: “Memory scarcity today is being driven in large part by the AI buildout itself and unlike a component that simply raises our cost with no offset benefit. Tighter memory supply is a symptom of the same demand surge that’s driving our own growth.”

Nvidia Release: “We’ve partnered with our extensive network of suppliers to secure the critical components needed to meet demand for the next several years. Our commitments increased from $119 billion last quarter to $279 billion, primarily related to the procurement of memory.”

CFO: “Many of you have expressed concerns regarding our gross margins as component costs have risen significantly. As you are already aware, we are experiencing extreme pricing conditions in memory. The magnitude of the price increase has exceeded our prior expectations and are headed even higher into next year.”

CFO: “We have now absorbed the cost increases. We have also repriced our products in the marketplace.”

Nvidia guided 3rd quarter GAAP and non-GAAP gross margin guide at 74% +/- 50 basis points, saying margins will bottom in Q4 in the 71-72% range. In fiscal 2028, margins will be around 72% to 73%

Vera Rubin

CFO: “We commenced production shipments of Vera Rubin earlier this month, having already received purchase orders from every major hyperscaler, AI cloud and system OEM. We expect Vera Rubin to mark the fastest product ramp in Nvidia’s history.”

“We see Vera Rubin accounting for about 20% of data center revenue in Q3.”

(Back-of-envelope: Nvidia guided total Q3 revenue at about $108 billion +/- 2%. So maybe Q3 data center revenue will be $100.4 Billion – and Vera Rubin revenue will hit $20.09 billion for Nvidia.)

China

CFO: “In Q2, we shipped less than 1% of our total data center revenue in Hopper 200 products to customers based in China in accordance with the US government licenses. And given ongoing geopolitical uncertainty, there is no China data center compute revenue in our forward outlook.”

Visibility into fiscal year 2028

Jensen: “We just have a lot greater visibility now both upstream and downstream, we’ve just never forecasted a year out…we will continue to work with our supply chain on that…”

Source: Dan Nystedt