Nvidia (NASDAQ:NVDA) shares rose around 6% in premarket trading on Thursday after the chipmaker delivered a powerful long-term growth outlook, reinforcing expectations that global investment in artificial intelligence infrastructure will remain a major driver of demand for years to come.
The company forecast revenue growth of 70% for its next fiscal year, ending January 2028, significantly ahead of Wall Street expectations and highlighting continued appetite for AI computing capacity. Nvidia acknowledged that shortages of memory and other components could limit the pace at which it satisfies that demand.
Shares initially slipped more than 1% following the results before reversing course and gaining nearly 5% in extended trading.
“AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue,” Nvidia Chief Executive Jensen Huang said.
Nvidia sees AI computing market continuing to expand
The longer-term forecast could help address investor questions about the durability of the AI infrastructure boom following several years of exceptional spending growth.
Nvidia pointed to expanding demand from hyperscale technology companies, specialist AI laboratories, enterprises, sovereign customers and industrial users as evidence that the market is broadening rather than approaching a peak.
Executives also outlined a multi-year growth roadmap centred on the rollout of the next-generation Vera Rubin platform and increasing business from AI laboratories, including OpenAI.
The 70% growth forecast is particularly notable because Nvidia rarely provides guidance so far in advance.
“We’ve never forecast or never guided to a year in advance,” Huang said.
Before the results were released, analysts had expected revenue growth of around 44% for the same period.
“What makes (the forecast) even more credible is that demand is broadening beyond the original hyperscalers with AI clouds, enterprises, sovereign buyers and industrial customers now growing materially faster,” said Shay Boloor, chief market strategist at Futurum Equities.
Vera Rubin ramps up as data centre revenue surges
Nvidia said its Vera Rubin platform has begun shipping to customers and is expected to contribute around one-fifth of total data centre revenue during the current quarter, which ends in October.
Data centre revenue more than doubled to $89 billion in the fiscal second quarter ended in July, comfortably exceeding the $85.08 billion expected by analysts, according to LSEG data.
The company expects AI laboratories to account for approximately a quarter of its overall business next year, demonstrating an increasingly diversified customer base.
Nvidia also highlighted rapid expansion among so-called neo-cloud providers, including Nebius and CoreWeave. These companies are expected to finish the year with more than eight gigawatts of Nvidia GPU capacity, compared with three gigawatts at the end of last year.
AWS partnership adds another growth opportunity
Nvidia also expanded its partnership with Amazon Web Services, with the companies planning to deploy an additional two million Nvidia graphics processors across Amazon’s global cloud infrastructure during 2027 and 2028.
The agreement provides another indication of the scale of infrastructure investment required to support growing AI workloads.
“We are seeing demand acceleration even at our scale. Customers’ forecasts point to our growth doubling next year. However … we are supply-constrained,” finance chief Colette Kress told analysts on an earnings call.
Supply limitations remain an important consideration. Higher memory prices and component costs are expected to put pressure on profitability, with Kress forecasting gross margins of approximately 71% to 72% in the fourth quarter, compared with around 74% in the third quarter.
Third-quarter revenue forecast beats expectations
Nvidia expects third-quarter revenue of $108 billion, plus or minus 2%, ahead of the $104.19 billion average analyst estimate compiled by LSEG.
The outlook follows another exceptional quarter. Fiscal second-quarter revenue more than doubled to $96.22 billion, surpassing expectations of $92.17 billion.
Adjusted earnings reached $2.22 per share for the three months ended July 26, also beating the analyst consensus of $2.10.
China remains an additional source of potential demand
Nvidia’s prospects in China remain less certain because of US export restrictions and regulatory developments.
Washington cleared around 10 Chinese companies, including Alibaba, Tencent and ByteDance, in May to purchase Nvidia’s H200 AI processors, although deliveries were subsequently delayed. Nvidia has not included China data centre sales in its latest outlook.
The company also began presenting its new Vera CPU to Chinese customers in June, while Chinese authorities have been considering whether to permit selected AI companies to purchase limited quantities of H200 chips.
A US Commerce Department official said last month that shipments had begun but remained “very few.”
Despite these uncertainties, Nvidia’s stronger-than-expected quarterly performance, rapid adoption of its next-generation hardware and exceptional forward growth forecast reinforce the company’s central position in the continuing global expansion of AI infrastructure.