Nvidia Forecasts 70% Revenue Growth as AI Spending Heads Toward $1.3 Trillion
Nvidia has decided to break with its usual practice of providing guidance only for the upcoming quarter and, for the first time, has given investors an outlook for the next fiscal year. The company expects to increase revenue by approximately 70% to $673 billion, which would further cement its position in the Dow Jones index and make it the second‑largest U.S. technology company by revenue, after Amazon. This projection substantially surpasses market expectations based on growth of about 44% and is effectively an attempt to convince the market that the AI boom is far from over. Against this backdrop, Nvidia stock moved higher.
Jensen Huang emphasized that the forecast is limited not by demand, but by suppliers’ production capabilities. According to him, customer demand for Nvidia products could at least double next year, while supply chain constraints limit the revenue growth the company can confidently project. The component shortage, according to the company’s estimates, will persist at least until early 2028.
The latest results so far support this optimism. In the second quarter, Nvidia’s revenue grew by 106% year‑on‑year to $96.2 billion, exceeding expectations. Operating profit increased by 124% to $63.7 billion, while net profit rose by 126% to $59.7 billion. At the same time, the profit margin reached 75%, despite a 55% increase in operating expenses.
Data centers remain the main source of growth. Revenue in this segment reached a record $89 billion, an increase of 117%. Of this, $48.7 billion came from hyperscalers, while another $40.2 billion came from other cloud, corporate, and industrial customers. The so‑called neocloud providers are growing especially rapidly; until recently, they were practically invisible in Nvidia’s business structure.
That is why the company is increasingly involved not only in equipment supplies but also in financing new market participants. The financial structures created by Nvidia are intended to help small cloud companies build AI infrastructure even without an established credit history, and in return, Nvidia expects to receive a share of their future revenue. In this way, the accelerator manufacturer is gradually transforming from an ordinary hardware supplier into one of the key financial and infrastructure players in the broader AI ecosystem.
At the same time, Nvidia continues to strengthen its position with its largest customers. Amazon has already agreed to purchase an additional 2 million AI chips over the next two years, in addition to the previously announced 1 million accelerators. The orders include Blackwell Ultra, Rubin, and Rubin Ultra chips, and potentially millions of central processing units as well. The exact value of the contract has not been disclosed, but it may amount to tens of billions of dollars.
Nvidia itself expects that the capital spending of the largest cloud companies will grow from the current $800 billion to $1.3 trillion next year. This investment wave forms the basis for the company’s further revenue growth. Meanwhile, Nvidia’s financial commitments related to future shipments increased from $119 billion to $279 billion over the course of the quarter, mainly due to the need to secure memory supplies in advance. Taking into account guarantees for infrastructure projects, total commitments reached $366 billion.
The company is also trying to strengthen its influence across the software ecosystem. Nvidia is in talks to acquire Hugging Face — the largest platform for open AI models — for more than $11 billion. If the deal goes through, it will be one of the largest in Nvidia’s history and will give the company direct access to millions of developers who use the platform to create AI products. However, this may simultaneously call into question the neutrality of Hugging Face, which today supports solutions from AMD, Intel, and other Nvidia competitors.
The main risk for Nvidia remains not a lack of demand, but the cost of meeting it. Rising memory prices are already starting to put pressure on margins. In the current quarter, the profit margin is expected to be around 74%, and by the fourth quarter, it may drop to 71-72%. Nevertheless, the company continues to return capital to shareholders aggressively — in the last quarter alone, investors received $26 billion through share buybacks and dividends.
As a result, Nvidia is increasingly resembling an infrastructure hub for the entire AI market. The company simultaneously sells accelerators, finances clients, invests in the ecosystem, and seeks to expand its position across software platforms. If its forecast for 70% revenue growth is realized, the current AI boom could indeed last for at least several more years. However, such rapid growth also makes Nvidia increasingly dependent on the ability of the global supply chain to provide the required volumes, packaging, and production capacity.