Record US$96.2B revenue and a reported $12.9B Hugging Face deal cement Nvidia's AI dominance as global markets rally
Nvidia posted record second-quarter revenue of US$96.2 billion, more than doubling year-over-year, sending its shares up 8.7 per cent and adding roughly US$450 billion to the chipmaker's market capitalisation in a single session.
It pushed Nvidia's total valuation to US$5.52 trillion and cemented its position as the world's most valuable publicly traded company. The results, surpassed analyst consensus estimates of US$92.2 billion, with non-GAAP earnings per diluted share of US$2.22 beating expectations of US$2.09, according to FactSet data.
Nvidia shares closed at US$227.98, not far from their all-time high of US$236, and the rally lifted chief executive Jensen Huang's net worth by US$15.6 billion in a single day to US$196.8 billion, placing him sixth on the Forbes Billionaires List, ahead of Meta's Mark Zuckerberg (US$196.2 billion) and Oracle's Larry Ellison (US$194.9 billion).
Demand "much greater than 70 per cent"
Chief financial officer Colette Kress said on the earnings call that Nvidia expects revenue growth of 70 per cent for fiscal year 2028 (running from February 2027 to January 2028) well above the 44 per cent analysts had anticipated. Huang went further, saying demand was "much greater than 70 per cent," but that the company is constrained by how much product it can supply.
Taiwan Semiconductor Manufacturing Co., Nvidia's primary manufacturer, continues to face supply constraints, while memory chips, a key component of Nvidia's systems, also remain in short supply, according to CNBC.
Huang sought to broaden the investment case beyond a handful of hyperscalers. "This time last year, one lab alone was driving the build-out," he said on the call. "Today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online with strong momentum across the U.S. and around the world."
Analyst reaction and price target upgrades
The results triggered a wave of analyst upgrades. Raymond James raised its price target on Nvidia to US$515 from US$352, the most bullish among major investment firms, while Bernstein lifted its target to US$400 from US$315 and JPMorgan moved to US$320 from US$280, according to Forbes.
"Nvidia's earnings results tell you that the valuation today is cheap. There is plenty, plenty of upside in the Nvidia share," said Siddy Jobe, senior portfolio manager at Econopolis Wealth Management's Exponential Technologies Fund, speaking on CNBC's Squawk Box Europe.
Paul Meeks, head of technology research at Freedom Capital Markets, echoed that view: "I continue to be very bullish on Nvidia and this entire ecosystem. I don't think we have really a threat of a slowdown until we get into 2028 earliest," he told CNBC's Squawk Box Asia.
A reported US$12.9 billion move into AI software
Compounding the earnings story, Nvidia has reportedly agreed to acquire Hugging Face, the leading open-source AI model repository, for US$12.9 billion, according to The Information, which cited a person with knowledge of the deal. Business Insider separately reported that Nvidia had been "in talks" to acquire the platform.
Hugging Face is one of the most widely used platforms for sharing and working with open-source AI models. If completed, the deal would extend Nvidia's reach from hardware into the software and model ecosystem giving the chipmaker a stake in virtually every layer of the AI development stack. Neither Nvidia nor Hugging Face had issued an official statement as of publication.
Global markets lift on AI optimism
The Nvidia result rippled across global equity markets on August 28. In Europe, Paris's CAC 40 gained 1.1 per cent, Germany's DAX rose 0.6 per cent, and Britain's FTSE 100 edged up 0.2 per cent. Asian markets were broadly positive, with Tokyo's Nikkei 225 gaining 0.4 per cent and Hong Kong's Hang Seng adding 0.2 per cent, according to BNN Bloomberg. Several chip stocks also rallied in the U.S., with Broadcom and Intel both moving higher alongside neocloud provider Nebius.
