Nvidia's quarterly report once again proved that the era of the "curse of strong results" is a thing of the past. On August 26, the company presented its financial results for the second fiscal quarter, which not only beat consensus forecasts but also triggered a powerful reversal in after-hours trading. After a brief dip to $205, NVDA shares surged to $219.12, representing a gain of more than 4.5%. Investors expecting another trap received the opposite signal.
Fundamental breakthrough: revenue +106% and record data center
Key metrics came in stronger than the boldest expectations. Quarterly revenue reached $96.2 billion against the Wall Street forecast of $92.2 billion, demonstrating growth of 106% year-over-year. Adjusted earnings per share hit $2.22, exceeding the expected $2.10. The Data Center segment is especially impressive: sales jumped 117% to $89 billion, while analysts had only factored in $85.8 billion. Sales to "hyperscalers"—the largest cloud providers—also beat forecasts, coming in at $48.71 billion versus the expected $43.55 billion.
Gross margin held steady at 75%, fully matching consensus. Net profit rose 118% to $54 billion, and free cash flow reached $21.3 billion. These figures finally dispel concerns about an "AI bubble" and excessive concentration of demand among a limited circle of clients—the customer base is expanding, confirming the sustainability of the trend.
Q3 forecast: above the market's "whisper"
An even more important signal was the forecast for the current quarter. Nvidia expects revenue in the range of $108 billion (plus or minus 2%), which is significantly above the analyst consensus of $104.2 billion and aligns with the upper end of traders' informal expectations. Notably, the forecast does not include sales of computing solutions to China—meaning the company's real potential is even higher.
The backlog of committed purchases more than doubled—from $119 billion to $279 billion—primarily driven by memory supply contracts. The company confirmed that the Vera Rubin architecture, successor to the Blackwell line, is moving into mass production, and server racks are already operating at partners' facilities. CEO Jensen Huang emphasized: "AI has reached an inflection point—AI tokens are generating profit, and computing has become a profitable business."
Shareholders also received support: during the quarter, the company returned approximately $26 billion and retains the capacity to buy back another roughly $99 billion. This softened volatility and strengthened confidence in the stock.
My view: NVDA's reversal in after-hours trading is not just a reaction to strong numbers but a paradigm shift. The market has finally stopped punishing the company for outperformance, seeing in the forecasts not only growth but also risk manageability. For investors, this is a signal that the correction of recent weeks was the final phase of consolidation before a new upward move.