Nvidia reports second-quarter fiscal 2027 results after the US close on 26 August. Consensus expects $2.08 per share on roughly $92 billion of revenue, against Nvidia's own guidance of $91 billion. Data centre demand, gross margin, and the China export overhang are the numbers investors will watch closest.
Nvidia has spent two years training the market to expect blowout results, and that habit is now the source of its biggest problem heading into the 26 August print. Nobody doubts the company leads in AI accelerators, or that hyperscalers keep spending. The question is whether the numbers can keep pace with a share price that already assumes they will.
What the market expects
Consensus sits at $2.08 per share on roughly $92 billion of revenue. Nvidia's own guidance called for $91 billion, give or take 2%, so a small beat is more or less priced in already. What the market really wants is a strong outlook for the following quarter, since that is where the argument about AI-spending durability gets settled.
The first quarter set the tone: revenue came in at $81.6 billion, up 85% on the year. Data centre alone contributed $75.2 billion. Non-GAAP gross margin held at 75%. Bank of America is looking for more than consensus, modelling $94 billion to $95 billion of revenue and a guide toward $107 billion to $108 billion next quarter, well ahead of the roughly $104 billion the Street currently carries.
Margins hinge on memory costs
Revenue growth alone no longer impresses investors; the margin line may say more than the top line on the day. Memory now makes up 40% to 50% of the cost of building Nvidia's systems, against 15% to 20% not long ago, and prices are rising across the industry. Even so, Bank of America still sees margins settling only a little lower, around 73% to 74%, helped by long-term supply deals including the relationship with SK Hynix.
The China overhang
Export controls have left Nvidia unable to serve the Chinese data centre compute market without sign-off from both Washington and Beijing. On top of that, US authorities are reportedly looking into whether Chinese buyers are getting hold of chips through other Asian countries. Nvidia's guidance already assumes nothing from China data centre compute, though, so a strong print would rest on demand that is already visible rather than any prospect of a thaw.
Technicals and the valuation trade-off
The stock hit a new record high in May before choppier trading set in, with recent weakness finding support twice around $190. Resistance has shown up near $225; a close above that level would open the way to record highs around $240. August has historically been positive 82% of the time since Nvidia's IPO, a seasonal tailwind that lines up with the Q2 report.
None of this makes the stock cheap. A lot of future growth is already in the price, and any sign that AI spending is cooling could bring a sharp pull-back. But Nvidia generated $48.6 billion of free cash flow in a single quarter a year ago and still handed roughly $20 billion back to shareholders. The premium holds because Nvidia remains the main platform supplier for the entire AI build-out, not just another chipmaker.
Source: IG
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