Nvidia has forecast revenue growth of about 70% in its next financial year, the first time the chipmaker has guided investors a full year in advance.
Colette Kress, the chief financial officer, told Wednesday's earnings call that the figure was constrained by what the company can build rather than by what customers want to buy.
Jensen Huang, the founder and chief executive, was blunter under questioning from analysts, saying demand was running well above 70% and that supply was the only reason the number was not higher.
Reversing the sell-off
The disclosure reversed an initially negative reaction to the results themselves.
Nvidia shares slipped in extended trading after the numbers were published, then climbed almost 5% once Kress began speaking, having closed the regular session at $209.66.
That followed seven consecutive daily falls, the longest losing streak since 2022, which had left the stock roughly 11% below its record high going into the results.
Nvidia, the world's most valuable company with a market capitalisation above $5 trillion, is treated by investors as a proxy for the health of the wider artificial intelligence (AI) trade.
Defending the financing
Kress used the call to confront the criticism that has dogged the company for months, namely that it is funding the customers who buy its chips.
She said Nvidia recognised the scale of its support for frontier AI laboratories and knew some would call it circular financing, before adding that the company saw it differently.
Nvidia has invested close to $50 billion in such laboratories, and Kress said it planned to provide selective credit enhancement, effectively backstopping borrowing, for nearly two gigawatts of computing capacity for another unnamed lab.
Memory prices bite
The main warning concerned margins.
Gross margin reached 75% in the second quarter but has been guided down to 74% in the current period, with Kress blaming sharply rising memory chip prices.
The company expects margins to recover the following year, partly by raising its own prices.
The quarter itself
Second-quarter revenue rose 106% year on year to a record $96.2 billion, ahead of analyst forecasts of roughly $92 billion.
Data centre revenue, the closely watched measure of AI infrastructure demand, grew 117% to $89 billion, while net income rose 126% to $59.7 billion.
Adjusted earnings came in at $2.22 a share against expectations of $2.09.
Nvidia guided third-quarter revenue to $108 billion, plus or minus 2%, comfortably above the $103.9 billion analysts had pencilled in.
Kress said the cloud industry's order backlog now exceeded $2 trillion, with capital spending by the five largest hyperscale operators, the companies that rent out computing power at scale, expected to reach nearly $800 billion this year and $1.3 trillion in 2027.
The guidance excludes any data centre revenue from China, where shipments of older approved chips accounted for less than 1% of data centre sales in the quarter.
