Quarterly Results Drive Historic Valuation
NVIDIA's share price rose 4.8% on Friday, briefly pushing its market capitalisation above $4 trillion for the first time, after the company reported fiscal Q2 2027 results that exceeded analyst estimates on every key metric. Data Center revenue of $36 billion accounted for 88% of total company revenue and grew 22% sequentially, driven by Blackwell B200 and B300 GPU deliveries to hyperscale cloud customers.
Gross margin came in at 75.1%, above the 74.5% consensus estimate, reflecting manufacturing efficiencies as TSMC's 4NP production matured and CoWoS-L advanced packaging yields improved. Operating income reached $23.8 billion, up from $19.1 billion in Q1.
Who Is Buying and Why
CEO Jensen Huang highlighted that sovereign AI — national-government AI infrastructure spending — contributed approximately $8 billion in the quarter, up from a negligible base two years ago. Sovereign customers include programmes in Saudi Arabia, UAE, Japan, and the EU's Common Computing Infrastructure initiative.
Custom silicon from NVIDIA's NVLink Fusion programme also entered revenue for the first time, as hyperscale partners began deploying custom chip-on-NVIDIA-fabric configurations that blend customer-designed dies with NVIDIA interconnect and networking.
Forward Guidance
NVIDIA guided Q3 revenue at $39 billion, plus or minus 2%, implying continued sequential growth. CFO Colette Kress noted that supply remains the binding constraint — not demand — and that the company's ability to grow further depends on TSMC expanding CoWoS-L capacity, which is on track for a step-up in October.