Nvidia revenue tops $96 billion as memory commitments soar to $160 billion — CEO Jensen Huang says AI 'has reached its inflection point'
It has become a tradition that every single quarter Nvidia reports record results that outpace all of its quarterly results before that. This Wednesday was no exception as the company posted revenue of $96.2 billion, which was up 106% year-over-year, due to rising demand for its AI hardware. But such results come at a cost, as the company has to invest massively in its future. In the second quarter of its fiscal 2027, Nvidia had to commit to procuring memory worth up to $160 billion, which includes its memory supply pact with SK hynix.
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For the second quarter of Nvidia's FY2027, which ended on July 26, 2026, the company's GAAP revenue hit a record $96.221 billion, up 18% quarter-over-quarter (QoQ) and 106% compared to the same quarter a year ago. Nvidia's net income totaled $59.688 billion, up 126% year-over-year (YoY), as its gross margin reached 75.0%. Sales of Nvidia's Compute & Networking hardware reached $88.299 billion, up 18% sequentially and 114% YoY, whereas sales of its graphics hardware hit $7.922 billion, up 12% sequentially and 46% year-over-year.
"AI has reached its inflection point," said Jensen Huang, founder and CEO of Nvidia. "AI is doing useful work. Its tokens are productive and profitable. Now, compute is revenue. And demand is accelerating. [...] We have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online [...]. The AI infrastructure buildout is at full steam. Vera Rubin, now in full production, was built to power exactly this moment."
Nvidia's results were driven by sales of its data center-grade AI hardware as various customers bought $89.023 billion worth of equipment, an increase of 18% sequentially and a rise of 117% compared to the same quarter a year ago. Hyperscalers purchased $48.710 billion worth of hardware from Nvidia (up 102% YoY and 13% QoQ), while revenue from AI Clouds, Industrial and Enterprise climbed to $40.313 billion (up 138% YoY and 25% QoQ), an indicator that while hyperscalers still purchase more equipment from Nvidia, the ACIE segment is growing faster. Sales of Nvidia's Edge Computing products were $7.198 billion (up 27% YoY and 13% QoQ), which means that sales of graphics products for PCs were strong despite shortages of GPUs and memory.
Commitments total $279 billionNvidia expects demand for its products to remain strong in the coming years. To meet that demand, the company increased its long-term purchase commitments from $119 billion in Q1 FY2027 to $279 billion in the second quarter. Typically, Nvidia's long-term supply commitments included pre-payments and commitments for wafer processing and advanced packaging at TSMC, as well as for HBM memory made by DRAM makers. This time around, Nvidia explicitly says that the bulk of the commitments are 'primarily related to the procurement of memory.'
Such huge commitments indicate that the company projects massive demand for its data center AI products in the coming years. During the conference call with financial analysts and investors, it indicated that its customer forecasts point to doubling demand next year, but Nvidia currently believes its supply chain can support about 70% growth.
"Even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%," Huang said. "The unconstrained would be a lot, a lot higher. [...] We have secured a lot of supply, but we just need a lot more."
To that end, the $279 billion supply commitment should be interpreted as not a precautionary inventory-building, but a strategic move to ensure shipment growth. Nvidia is effectively reserving memory and other capacity because it expects demand to exceed what the supply chain can deliver through at least the end of FY2028, as its management explicitly says supply will remain a bottleneck at least through FY2028.
$108 billion per quarter envisioned in Q3For the third quarter of FY2027, Nvidia expects revenue of approximately $108 billion, 2%, with no data center compute revenue from China included in its outlook due to uncertainties with export and import licenses. The company projects a GAAP gross margin of around 74% and expects GAAP operating expenses of approximately $9.2 billion.