Quick Read
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NVDA revenue surged 106% to $96 billion, and Vera Rubin is set to be the fastest product ramp in NVIDIA’s history.
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AMD trades at a P/E of 212 versus NVDA’s 44, while Intel’s foundry lost $2.1 billion last quarter, making NVIDIA’s valuation look compelling.
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Jensen Huang admits some will call NVIDIA’s $50 billion in AI lab investments and $279 billion in supply commitments ‘circular financing.’
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I have added to my NVIDIA (NASDAQ:NVDA) position after every earnings report for more than a year. This week, chip stocks sold off in a global tech rout on AI funding worries. Shares slipped 5.75% over the past week to $217.23, a decline that puts the fundamentals in focus.
Why NVIDIA’s AI Factory Keeps Widening Its Lead
NVIDIA sells the entire AI stack: GPUs, CPUs, networking, systems and the CUDA software layer. Each generation broadens the gap. As the CEO put it, “Now, compute is revenue.” Demand still exceeds what NVIDIA can build. Management has “supply for 70%” growth in fiscal 2028, and “Our demand is much higher than that.”
Three Metrics Driving NVIDIA’s Lead
Growth keeps accelerating. Q2 FY2027 revenue reached $96.22 billion, up 105.8% YoY, the fourth consecutive quarter of faster growth. Over six quarters, EPS rose from $0.81 to $2.22 with a beat every time. Q3 guidance sits at $108.0 billion.
The advantage shows up in the margins. Non-GAAP gross margin hit 75.0%, return on equity runs 101.5% and return on invested capital 92.2%. Vera Rubin is worth $40 billion per gigawatt to NVIDIA, against $25 billion for Blackwell. Networking revenue rose 138% to $40.31 billion, so customers buy the whole stack.
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The balance sheet adds flexibility. Debt-to-equity stands at 0.073 with interest coverage of 503x. NVIDIA returned $26.0 billion in Q2 alone and has $99.0 billion left on its buyback authorization. The dividend yield of 0.019% is small, so the return story rests on compounding, and the quarterly payout already rose from $0.01 to $0.25. At a P/E of 44, NVIDIA trades at that multiple for this engine.
