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Nvidia on Wednesday forecast a 70% \u200bjump in revenue next fiscal year, underscoring unabated demand for AI computing, while warning that shortages of memory components would continue to curb how \u200cquickly it can expand.<\/strong><\/p>\n The chip company\u2019s shares rose nearly 5% in extended trading, after having dipped over 1% initially.<\/span><\/p>\n \u201cAI has reached its inflection point. It\u2019s doing useful work. Its tokens are productive and profitable. Now, compute is revenue,\u201d Nvidia Chief Executive Jensen Huang said.<\/span><\/p>\n The outlook is likely to reassure investors who have questioned how long the AI spending surge can last after years of explosive growth. By forecasting revenue \u200bgrowth well above Wall Street expectations and outlining demand from the biggest tech companies as well as AI labs, Nvidia is arguing that the market for \u200bAI computing is expanding rather than peaking, even as supply constraints limit how much business it can capture.<\/span><\/p>\n Executives shared a road map \u2060for growth over the next few years, including a ramp in its next-generation Vera Rubin processors and expanding sales at AI labs such as OpenAI.<\/span><\/p>\n Nvidia\u2019s outlook for 70% growth \u200bin its next fiscal year, ending January 2028, is a rare disclosure for the chip company, which typically does not issue such projections.<\/span><\/p>\n \u201cWe\u2019ve never forecast or never guided to \u200ba year in advance,\u201d Huang said. Ahead of Wednesday\u2019s results, analysts, on average, projected 44% revenue growth in the same period.<\/span><\/p>\n \u201cWhat makes (the forecast) even more credible is that demand is broadening beyond the original hyperscalers with AI clouds, enterprises, sovereign buyers and industrial customers now growing materially faster,\u201d said Shay Boloor, chief market strategist at Futurum Equities.<\/span><\/p>\n The company said its Vera Rubin platform, which has now started shipping \u200bto customers, will account for about a fifth of its overall data center revenue in the current quarter, which ends in October.<\/span><\/p>\n In its fiscal second quarter ended July, data \u200bcenter revenue more than doubled to $89 billion, beating estimates of $85.08 billion, according to LSEG data.<\/span><\/p>\n Nvidia said it expects demand from AI labs to contribute roughly a quarter of its \u200coverall business next \u2060year, indicating a diversified customer base.<\/span><\/p>\n The company added that the so-called neo-clouds, which include companies like Nebius and CoreWeave , are set to exit this year with more than 8 gigawatts of Nvidia GPU capacity, a surge from the 3 gigawatts at the end of last year.<\/span><\/p>\n Nvidia also announced an expansion of its partnership with Amazon\u2019s cloud computing unit, Amazon Web Services (AWS). The pair will deploy an additional 2 million Nvidia graphics processors across Amazon\u2019s global infrastructure in 2027 and 2028.<\/span><\/p>\n \u201cWe are seeing demand acceleration even at our scale. Customers\u2019 \u200bforecasts point to our growth doubling next \u200byear. However \u2026 we are supply-constrained,\u201d finance chief \u2060Colette Kress told analysts on an earnings call.<\/span><\/p>\n Soaring memory prices and higher component costs will continue to pressure its margins, Kress said, adding that margins would bottom in the fourth quarter at roughly 71% to 72%, down from about 74% in the third quarter. \u200bAnalysts were expecting 74.77% for the third quarter.<\/span><\/p>\n The company forecast third-quarter revenue of $108 billion, plus or minus 2%, compared with analysts\u2019 \u200baverage estimate of $104.19 billion, \u2060according to data compiled by LSEG.<\/span><\/p>\n Nvidia\u2019s China business has been highly uncertain. In May, Washington cleared roughly 10 Chinese firms, including Alibaba, Tencent and ByteDance, to buy one of Nvidia\u2019s most powerful AI chips, the H200, though deliveries stalled for months. Nvidia did not include China data center revenue in its outlook.<\/span><\/p>\n Nvidia began pitching its new Vera CPU to Chinese clients \u2060in June, \u200btelling them the chip could be available by August, as China separately weighed allowing top AI firms limited \u200bH200 purchases.<\/span><\/p>\n Last month, a U.S. Commerce Department official said shipments had begun but remained \u201cvery few.\u201d<\/span><\/p>\nSUPPLY CONSTRAINTS LIMIT GROWTH<\/span><\/h2>\n
CHINA CHIP SALES REMAIN UNCLEAR<\/span><\/h2>\n