Nvidia shares surged about 9% after the AI chipmaker posted results that far exceeded market expectations, easing investor fears that AI investment has peaked. Chief Executive Jensen Huang became the world's sixth-richest person.
Nvidia closed at $227.98 on the 27th, up 8.7% and near its record high of $236. The rally lifted Huang's net worth by $15.6 billion to $196.8 billion, putting him ahead of Meta CEO Mark Zuckerberg at $196.2 billion and Oracle founder Larry Ellison at $194.9 billion.
Nvidia said on the 26th that revenue for the second quarter of fiscal 2027, covering May through July 2026, rose 106% from a year earlier to $96.2 billion, or about 133 trillion won. Net profit more than doubled to $54 billion, and earnings per share came to $2.22. Analysts had expected revenue of $92.2 billion and EPS of $2.09, according to FactSet.
Market capitalization expanded by roughly $450 billion to $5.52 trillion from $5.07 trillion, keeping Nvidia the world's most valuable company. Apple followed at $4.59 trillion and Alphabet at $4.13 trillion.
Nvidia Says Half of Revenue Comes From Outside Hyperscalers
The share gain signals that investor anxiety over AI spending has eased. Investors had worried about the scale of Big Tech's AI capital expenditure, the circular financing arrangements among companies involved and how much return that investment can generate. Competition from rivals such as AMD and Google in the AI chip market had also weighed on sentiment.
Nvidia said its customer base for graphics processing units is broadening. "Most people focus only on the hyperscalers, but half of the market is in neoclouds and sovereign AI," Huang said, referring to operators that lease AI data center capacity. Of the $96.2 billion in revenue from May through July, $49 billion came from hyperscalers, while the remaining $47.2 billion came from the AICE segment, which covers neoclouds, government-led sovereign AI projects and general enterprises. AICE revenue rose 138% from a year earlier, outpacing the overall growth rate of 106%.
Nvidia's unusual decision to issue a longer-range outlook also boosted the stock. Huang said the company had never before forecast results a year ahead. It has given some figures on AI chip sales roughly two years out in recent years, but spelling out a revenue growth rate for the next fiscal year is rare. "Visibility is much greater now," he said, explaining the decision.
Nvidia guided for the strong performance to continue into the third quarter of fiscal 2027, with revenue rising to $108 billion, above the $104 billion analysts had projected. Brokerages raised their price targets in succession. Raymond James was the most bullish, lifting its target to $515 from $352, while Bernstein raised its target to $400 from $315 and JPMorgan to $320 from $280.
Separately, Nvidia has agreed to acquire Hugging Face, a hosting platform for open-weight AI models, for $12.9 billion, The Information reported, citing unnamed sources. The price is more than double the $4.5 billion valuation Hugging Face secured in a funding round in August 2023, when Nvidia invested $235 million.
