Nvidia Data Center Revenue Hits $89 Billion in Q2

Nvidia Inc. reported second-quarter fiscal 2027 revenue of $96.2 billion, more than double the $46.7 billion earned in the previous year. The company's data center business drove this growth, generating $89 billion, which represents 92.5% of total revenue and a 117% increase year-over-year.

While hyperscale customers including Amazon Web Services, Microsoft Azure, and Google Cloud Platform remain the largest revenue source at $48.7 billion, the AI Clouds, Industrial, and Enterprise group is growing faster, contributing $40.3 billion. This shift indicates a diversifying buyer class beyond the major public cloud providers. Growth is further supported by the August production shipments of the Vera Rubin next-generation platform, which is projected to account for 20% of data center revenue this quarter.

Despite the record revenue, the company guided for lower gross margins, expecting a drop to 74% in the third quarter and a potential bottom between 71% and 72% by the fourth quarter. Chief Financial Officer Colette Kress attributed this erosion to the rising cost of high bandwidth memory, noting that commitments for critical components rose from $119 billion to $279 billion. This trend suggests pricing power is shifting toward memory suppliers like Micron Technology.

Nvidia projects total third-quarter revenue of $108 billion, assuming no compute sales to China. Based on current mixes, the data center segment is positioned to potentially exceed $100 billion in a single quarter before the fiscal year ends in late January.