What happened
NVIDIA reported fiscal second quarter earnings on August 26th with $96 billion in revenue, $89 billion in data center revenue, and $2.22 in non-GAAP earnings per share. The firm guided $108 billion in revenue for the third quarter, topping analyst estimates of $104 billion.
Why it matters
Jim Cramer said the guidance on the earnings call is what triggers a big move in the stock, noting hundreds of thousands of shares traded without that knowledge. The strong guidance indicates the business is operating well and poised to continue, though gross margin guidance of 74% for Q3 and 71%–72% in Q4 point to cost control difficulties.
What to watch
For fiscal year 2028, NVIDIA guided 70% annual revenue growth along with $279 billion in supply commitments, indicating stable future demand. The forward P/E ratio of 24.27 is reasonable compared to INTC's 68.97 and AMD's 64.94.
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The article centers on how NVIDIA's earnings call guidance, not just the headline numbers, moves the stock. Jim Cramer highlighted that the guidance on the call is what triggers a big move, and the company's Q3 revenue guide of $108 billion topped analyst expectations of $104 billion. This suggests the market reacted to the forward-looking outlook more than the reported quarter itself.
At the same time, the body notes some cost pressures. The Q3 gross margin guidance of 74% and a range of 71% to 72% for Q4, attributed to memory prices, indicate that cost control is becoming difficult. The Q3 midpoint revenue guide also marks an 89.5% annual growth for a sequential slowdown, and fiscal year 2028's 70% growth points toward similar headwinds.
The valuation picture remains supportive, with NVIDIA's forward P/E of 24.27 looking reasonable against INTC's 68.97 and AMD's 64.94. Short interest is negligible at 1.2% of float, and hedge fund interest rose to 285 funds in Q2 from 275 in Q1. These factors together paint a picture of a company with strong demand signals but facing some margin pressure.
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