Nvidia data centre revenue more than doubled to $89B amid AI spending boom

Nvidia, the leading chip company, reported a staggering 70% increase in revenue for its next fiscal year, reaching $89 billion. This surge in data centre revenue highlights the relentless demand for AI computing. However, Nvidia acknowledged that memory component shortages continue to hinder its expansion plans. CEO Jensen Huang emphasized that AI has reached a turning point, with its applications proving both useful and profitable.

Huang's forecast surpasses Wall Street expectations, suggesting that the AI spending boom is far from peaking.

The company provided a roadmap for future growth, including the introduction of its next-generation Vera Rubin processors and expanding sales to AI labs like OpenAI. Nvidia's outlook for the next fiscal year, ending January 2028, is particularly noteworthy, as it is the first time the chip company has disclosed such a prediction. Analysts have projected a more modest 44% revenue growth for the same period.

The Vera Rubin platform, which has begun shipping to customers, is expected to contribute about a fifth of the company's overall data centre revenue in the current quarter. In the fiscal second quarter, data centre revenue more than doubled to $89 billion, surpassing analysts' estimates of $85.08 billion. Nvidia anticipates that demand from AI labs will account for roughly a quarter of its total business next year, indicating a diversified customer base.

The company also announced an expansion of its partnership with Amazon Web Services, deploying an additional 2 million Nvidia GPUs across Amazon's global infrastructure in 2027 and 2028. However, Nvidia remains supply-constrained, with finance chief Colette Kress noting that soaring memory prices and higher component costs will continue to pressure margins. Margins are projected to bottom in the fourth quarter at around 71% to 72%, down from 74% in the third quarter.

Revenue for the third quarter is forecasted at $108 billion, with a possible variation of plus or minus two percent, compared to the average analyst estimate of $104.19 billion. Nvidia's China business has been volatile, with the U.S. Commerce Department granting permits to select Chinese firms, including Alibaba, Tencent, and ByteDance, to purchase Nvidia's powerful AI chip, the H200. However, shipments have been slow, with only "a few" delivered as of late.