How did Nvidia's stock react to the earnings?

After initially falling nearly 3% in after-hours trading, the stock turned higher and was up 4.51% to $219.12 by 5:37 PM New York time.

What did Nvidia say about its gross margin?

For the latest quarter, adjusted gross margin was 75.0%, slightly below the 75.1% consensus. For the next quarter, it guided between 73.5% and 74.5%, below the 74.9% consensus, citing memory price increases.

Why did Salesforce's stock rise after its earnings?

Salesforce beat revenue and earnings expectations, raised its full-year guidance, and announced an expanded partnership with AI firm Anthropic, called 'ClaudeForce,' to integrate Anthropic's Claude AI with Salesforce CRM software.

AI Stocks & MarketsTop Companies' AI MovesAI Business & IndustryTop Companies AIAug 27, 2026Aug 28, 2026, 06:31 JST

Nvidia beats estimates but margin outlook disappoints

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3 Key Points

What happened
Nvidia reported fiscal Q2 2026 (May–July) revenue of $96.221 billion, up 2.06× year over year, and adjusted EPS of $2.22, both beating analyst expectations. However, adjusted gross margin came in at 75.0%, slightly below the 75.1% consensus. The stock initially dropped nearly 3% in after-hours trading, then turned higher to +4.51% after the company guided to stronger-than-expected fiscal 2028 revenue growth of about 70%.
Why it matters
The results show Nvidia's AI demand remains strong, but rising memory prices are pressuring profitability. This matters for the broader market because Nvidia's earnings are a key barometer for AI infrastructure spending. The company also disclosed that its total AI data center facility lease guarantees jumped to $108.5 billion, including a $105 billion commitment to SB Energy, signaling heavy customer investment.
What to watch
Nvidia expects Q3 revenue of $108 billion ±2%, above analyst expectations, but its gross margin outlook of 74.0%–74.5% is below the consensus of 74.9%. Also watch upcoming earnings from Marvell Technology (Aug 27) and Broadcom (Sep 2) to gauge AI semiconductor industry health.

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Context & Analysis

Nvidia's results underscore a dual narrative: surging demand for AI compute versus rising input costs. Memory price inflation is trimming gross margins, a pressure that likely extends to other hardware makers and AI data center operators, whose investment budgets may exceed initial plans. The company's outsized revenue growth forecast for fiscal 2028 suggests customer commitments remain strong, and its quarterly guidance exceeded expectations, offsetting margin concerns in investor sentiment.

Salesforce's beat and expanded Anthropic partnership signal that software companies can translate AI into tangible business results, addressing earlier fears that AI would disrupt their revenue models. The market is now looking to Marvell and Broadcom earnings, plus monthly global semiconductor sales data, to confirm whether the AI-driven demand boom is sustainable or poised to decelerate, as Nomura strategist Makoto Murayama cautions.

FAQ

How did Nvidia's stock react to the earnings?: After initially falling nearly 3% in after-hours trading, the stock turned higher and was up 4.51% to $219.12 by 5:37 PM New York time.
What did Nvidia say about its gross margin?: For the latest quarter, adjusted gross margin was 75.0%, slightly below the 75.1% consensus. For the next quarter, it guided between 73.5% and 74.5%, below the 74.9% consensus, citing memory price increases.
Why did Salesforce's stock rise after its earnings?: Salesforce beat revenue and earnings expectations, raised its full-year guidance, and announced an expanded partnership with AI firm Anthropic, called 'ClaudeForce,' to integrate Anthropic's Claude AI with Salesforce CRM software.

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