NVIDIA Surges 6% as a 70% Growth Forecast Overrides a Memory Margin Warning, AMD and Intel Tick Up
NVIDIA just posted the kind of earnings beat that lifts an entire sector, but the same force powering its revenue growth is quietly eating into its margins in a way management admits will get worse before it gets better.
A major player in 2020s tech hardware is pulling up some index funds today, it seems. The iShares Semiconductor ETF (NASDAQ:SOXX) is up 2% to $527 Thursday morning as semiconductor names react to NVIDIA’s post-earnings surge. Invesco QQQ Trust (NASDAQ:QQQ) is up 0.8% to $717.44, trailing the chip cohort as the AI infrastructure trade reasserts leadership over broader large-cap technology.
NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) stock is up 6% to $221.80 in early Thursday trading after fiscal Q2 2027 results and a fiscal 2028 revenue growth outlook that overshadowed a three-quarter gross margin reset. NVIDIA stock was up 13% year to date through Wednesday’s close, following a 2% Wednesday decline to $209.66 that capped a seven-session losing streak through Monday.
Advanced Micro Devices (NASDAQ:AMD) stock is up 1% to $484.44 while Intel (NASDAQ:INTC) stock is up 1% to $89.54, both riding a sympathetic read-through on NVIDIA’s AI compute demand commentary. Advanced Micro Devices stock was up 125% year to date through Wednesday’s close, and Intel stock was up 139% year to date over the same stretch.
Blowout Beat and a 70% Forward Growth Call
NVIDIA reported fiscal Q2 2027 revenue of $96.2 billion, more than double a year earlier, and data center revenue of $89 billion, up 18% sequentially. Non-GAAP EPS came in at $2.22 against a $2.09 consensus, and Q2 non-GAAP gross margin printed at 75%. Q3 FY2027 revenue guidance is $108 billion plus or minus 2%, which would mark the company’s first quarter above $100 billion.
Chief Financial Officer Colette Kress said NVIDIA expects to grow revenue “approximately 70% in fiscal 2028” and called it “a supply-constrained outlook.” Kress added that customer forecasts point to growth doubling next year, while NVIDIA’s own outlook holds at the 70% pace because the company is supply constrained.
The growth call rests on the Vera Rubin platform, which NVIDIA said is now in full production, and on Blackwell Ultra shipments that lifted data center compute revenue 102% year over year and data center networking revenue 138%. Analyst consensus on NVIDIA sits at an average target price of $304.73, with 48 Buy and 10 Strong Buy ratings in place ahead of the results.
Memory Costs Reset the Margin Runway
NVIDIA guided Q3 gross margin to 74% plus or minus 50 basis points, expects Q4 margins to bottom at 71% to 72%, and expects margins to settle at 72% to 73% in fiscal 2028. That’s three consecutive quarters of compression against Q2’s 75% level.
Kress pinned the compression squarely on memory. She stated NVIDIA is “experiencing extreme pricing conditions in memory” and that “the magnitude of the price increase has exceeded our prior expectations and are headed even higher into next year.” Kress framed the scarcity as “a symptom of the same demand surge that’s driving our own growth,” effectively arguing that the same AI build-out lifting NVIDIA’s revenue is also inflating its input costs.
NVIDIA’s supply commitments swelled to $279 billion at quarter end, largely tied to memory procurement for Vera Rubin production. NVIDIA also returned a record $26 billion to shareholders in Q2 through $20 billion in buybacks and $6 billion in dividends, funded by strong cash generation even as capital commitments balloon. On China, NVIDIA shipped less than 1% of data center revenue in H200 products to China-based customers, took a $400 million charge on excess H200 inventory, and included no China data center compute revenue in its forward outlook.
What to Watch
Chief Executive Officer Jensen Huang, asked to rank NVIDIA’s supply constraints, said “our entire supply chain is challenged” and that “everybody is really running flat out.” That framing is why Advanced Micro Devices and Intel are catching a bid Thursday morning, as the semiconductor complex prices in a longer, deeper compute cycle rather than a peak (we profiled seven non-chipmaker suppliers riding the same AI buildout in a free report here). Management is telling the market it can grow 70% next year while warning margins will fall for three straight quarters because memory suppliers hold the pricing power.
Retail positioning has flipped alongside the results, with Reddit’s aggregate NVIDIA sentiment score jumping to 74 bullish in the Thursday morning snapshot from 38 bearish earlier in the week, with WallStreetBets reading 88 after the results crossed. Investors can watch for whether NVIDIA stock holds its early Thursday advance through the session and whether the iShares Semiconductor ETF sustains sector leadership over the Invesco QQQ Trust.
Traders may want to check for signs that the memory margin narrative starts to weigh once the initial growth headline fades. Given the three-quarter margin runway NVIDIA just laid out, investors should size their positions carefully across the AI compute complex, keeping their exposure balanced against a memory cost cycle that management says gets worse before it settles.
Contact [email protected] for any questions or corrections.
David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.
His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.
With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.
