Chipmaker Nvidia delivered another beat-and-raise in quarterly results on Wednesday evening, wowing investors with a higher-than-expected sales forecast that's sending the stock higher in Thursday trading. But the company's second-quarter fiscal 2027 earnings report contains a few numbers that should give investors pause:
Higher accounts receivable
From January to July, Nvidia reported a roughly 63% rise in net accounts receivable, from $38.5 billion to $63.1 billion. This shows a hefty increase in the number of orders the company has filled but hasn't been paid for yet. "It's worth keeping an eye on," Gil Luria, head of tech research at D.A. Davidson, told CNBC on Thursday:
More supply chain investments
While its income backlog is growing, Nvidia's backstopping promises to customers and suppliers on the other side of its balance sheet are also getting bigger, amplifying a chorus of criticism over circular financing:
A drop in free cash flow
Amid the balance sheet pressures, Nvidia's free cash flow also took a hit in the second quarter, dropping to $21 billion from $49 billion in the first quarter – way below estimates:
