You Could Buy Nvidia for Its 106% Revenue Growth and 75% Gross Margin. But There's an Even Better Reason the AI Stock Has Room to Run.
Nvidia's Vera Rubin platform solidifies Nvidia's foundational position in the AI infrastructure build-out.
Overview
Despite sky-high expectations, Nvidia (NASDAQ: NVDA) delivered yet another blowout quarter that featured $96.2 billion in revenue -- up 106% year over year and 18% quarter over quarter, along with a 75% gross margin. The gross margin was especially impressive, considering surging prices for memory chips -- which Nvidia buys and integrates into its rack-scale Vera Rubin platform. However, Nvidia does expect gross margin to tick down to 74% in the upcoming third quarter of fiscal 2027, with revenue at $108 billion, up 12.3% quarter over quarter.
Still, the results were impeccable, and so was Nvidia's guidance for a 70% increase in fiscal 2028 revenue compared with fiscal 2027, driven by surging demand from hyperscalers, artificial intelligence (AI) labs, AI natives, enterprises, and sovereign customers. The guidance reinforces the need for rapidly expanding AI infrastructure and follows up on Nvidia's recently announced partnerships with financial institutions for $500 billion in AI capital investment to build Nvidia's computing and full-stack AI infrastructure. The computing will be sold to AI labs, AI start-ups, AI clouds, and other enterprises that need computing power.
Details
There was a lot to like about Nvidia's report and earnings call. But there's one metric that stood out above the rest. Here's my biggest takeaway from Nvidia's Q2 earnings, and why it cements Nvidia as one of the best growth stocks to buy now.
Source
Originally published at www.fool.com.