Nvidia forecasts 70% revenue growth for fiscal 2028

Nvidia's decision to issue a year-ahead forecast marks a departure from its usual practice, signaling confidence in sustained demand for its AI chips. The 70% growth projection, which implies revenue of up to $700 billion, is well above the $570 billion analysts had modeled, reflecting a belief that AI infrastructure spending will continue to expand rapidly. The company also highlighted that non-hyperscale customers, including sovereign AI projects and neoclouds, now make up about half of its business, growing at 100% annually. This diversification reduces reliance on a few large cloud providers and supports the bullish outlook.

However, Nvidia acknowledged supply constraints that are limiting even higher growth, and it raised prices by about 15% to pass on memory costs. These price increases carry risks, as the return on investment for AI at the customer level remains uncertain. The company also faced market skepticism over its investments in AI partners, which some see as circular financing. Nvidia defended these deals as low-risk and high-reward, noting they contribute to a quarter of its business next year. The stock's 4% after-hours rally suggests investors are willing to accept the risks in light of the strong growth forecast.