Nvidia Projects 70% Growth for FY2028, Crushing Forecasts and Boosting Stock

Nvidia Corporation (NASDAQ: NVDA) once again surpassed Wall Street expectations with its quarterly results, but it was the company's staggering forward guidance that sent its shares soaring. The chipmaker projected fiscal 2028 revenue growth of approximately 70%, nearly double the consensus estimate, signaling that the artificial intelligence boom continues to accelerate.

Stellar Results and Shocking Guidance

For its second quarter of fiscal year 2027, Nvidia reported revenue of $96.2 billion and earnings per share of $2.22, beating analyst expectations by $4.3 billion and 6.7%, respectively, according to an Investing.com analysis. The performance marked the company's 15th consecutive quarter of topping estimates.

The Data Center segment was the primary growth engine, with revenue surging 117% year-over-year to $89 billion, now accounting for over 92% of the company's total revenue. In response to the report and outlook, Nvidia's stock jumped 9.7% to $229.96 in trading.

Key Drivers and Supply Constraints

Management confirmed that its next-generation 'Vera Rubin' GPU platform is on schedule for deliveries in the third quarter and is expected to contribute about 20% of data center revenue in the current period. The company also noted its Vera CPU has entered full production.

However, the company's explosive growth forecast is reportedly constrained not by demand, but by the availability of high-bandwidth memory (HBM). According to the earnings call, demand from hyperscale cloud providers—who have a backlog exceeding $2 trillion—is higher than the guidance suggests, making memory supply the key limiting factor for near-term growth.

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Capital Returns and Future Catalysts

Nvidia also demonstrated its significant cash generation by returning a record $26 billion to shareholders in the quarter through $20 billion in stock buybacks and $6 billion in dividends. Looking ahead, investors and analysts will be watching several key developments:

• The successful production ramp-up of the Vera Rubin platform in the coming quarters.
• Any resolution to memory supply constraints, which could provide further upside to guidance.
• The expansion of its Sovereign AI business, which grew 35% quarter-over-quarter.

The report prompted analysts to raise their price targets, with Raymond James increasing its target to $515 and RBC Capital lifting its to $330.

Market Context and Potential Risks

The bullish outlook is supported by projections that capital expenditures from major cloud providers will reach $1.3 trillion by 2027. Despite the strong momentum, potential risks remain, including long-term competition from custom-designed chips by hyperscalers and geopolitical tensions related to a U.S. investigation into chip smuggling to China.