Nvidia Q2 poised for strength as Rubin ramp, AI demand sustain—RBC

Nvidia's fiscal 2025 trajectory is underpinned by two structural tailwinds: sustained demand for AI acceleration and the commercial introduction of the Rubin platform. While RBC's Q2 revenue estimate of $91.1 billion marginally undercuts Wall Street consensus at $92 billion, the critical insight lies in the expected acceleration into Q3, where RBC models guidance roughly 5% above the $103.8 billion consensus baseline. This acceleration is not merely a reversion to trend but a reflection of Rubin's pricing architecture—the more than 50% average selling price premium attached to the new platform—combined with a discrete new revenue stream: $10 billion in incremental CPU sales in H2 alone. Taken together, these two factors suggest that Nvidia's total addressable market is expanding even as its flagship GPU business matures, reducing reliance on unit growth to drive top-line expansion.

The supply-side narrative reinforces this picture. RBC's citation of $119 billion in purchase commitments in the last quarter signals that Nvidia's access to component supply remains unimpeded, a material differentiator in a market where semiconductor capacity constraints have historically limited growth. Against this backdrop, RBC's gross margin assumptions—75% in Q2 and Q3, with management expected to reiterate mid-70% guidance for fiscal 2027—embed confidence that pricing power persists even as competitive pressure mounts. The projection of more than $400 billion in free cash flow over two years, after dividends, anchors the bull thesis: Nvidia can simultaneously invest in growth, return capital to shareholders via buybacks, and maintain fortress-like financial flexibility.