Nvidia is betting that the artificial intelligence boom is far from over. The chipmaker on Wednesday forecast a 70% jump in revenue next fiscal year, pointing to continued demand for AI computing even as shortages of memory components threaten to constrain how quickly it can expand.
“AI has reached its inflection point. It's doing useful work. Its tokens are productive and profitable. Now, compute is revenue,” Nvidia Chief Executive Jensen Huang said.
Yet the guidance could have been even stronger if not for supply constraints. Nvidia is grappling with shortages of components including memory, which is facing a global crunch as AI buildouts accelerate.
The forecast is likely to ease investor concerns over how long the AI spending surge can sustain its extraordinary pace after years of explosive growth. Nvidia is projecting revenue growth well above Wall Street expectations while pointing to demand from the biggest technology companies as well as AI labs. The message is clear: the market for AI computing is still expanding rather than approaching a peak, even though supply constraints are limiting how much of that demand Nvidia can capture.
Based on the consensus projection of $396 billion in revenue for fiscal 2027, which ends in January, Nvidia's sales next year would reach $673 billion. That would put the chipmaker ahead of Apple and Alphabet, according to Wall Street projections, and behind only Amazon among U.S. tech companies.
The company said its position in the market is changing as demand for massive, multi-billion-dollar AI infrastructure projects spreads to a much wider range of customers. As AI becomes capable of doing useful work, Nvidia believes the spending that once came from a concentrated group of buyers is broadening.
That shift is significant because investors have worried that Nvidia's growth has depended too heavily on a small number of large technology companies, known as hyperscalers. These companies are building massive data centres, much of the capacity of which ultimately serves a handful of frontier AI labs such as OpenAI, whose computing requirements are among the largest in the industry.
“Demand is accelerating,” Huang said in a statement released alongside the second-quarter earnings. “This time last year, one lab alone was driving the buildout; today, 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 — with strong momentum across the U.S. and around the world.”
However, risks remain. Nvidia's business in China remains highly uncertain. In May, Washington cleared roughly 10 Chinese firms, including Alibaba, Tencent and ByteDance, to buy Nvidia's H200, one of its most powerful AI chips. Deliveries, however, stalled for months. Nvidia did not include China data centre revenue in its outlook.
In June, Nvidia began pitching its new Vera CPU to Chinese clients, telling them the chip could be available by August, while China separately considered allowing top AI firms to make limited purchases of H200 chips.
Last month, a U.S. Commerce Department official said shipments had begun, but remained “very few”.
Against that backdrop, Nvidia's second-quarter results still delivered another blockbuster performance. Revenue more than doubled to $96.22 billion, beating estimates of $92.17 billion. Adjusted profit came in at $2.22 per share for the three months ended July 26, compared with estimates of $2.10.
The outlook sent Nvidia shares nearly 5% higher in extended trading, after the stock initially dipped more than 1%.
