Nvidia CEO Jensen Huang did it again. The AI chip powerhouse delivered better-than-expected quarterly revenue and earnings that more than doubled the year-ago period. Business is so strong that management felt comfortable enough to provide a financial outlook further into the future than ever before.
Revenue in the company's fiscal 2027 second quarter increased 106% to $96.22 billion, outpacing the $92.165 billion consensus, according to estimates compiled by data provider LSEG. Adjusted earnings per share (EPS) increased 128% to $2.46, also exceeding the LSEG consensus estimate of $2.10.
Shares initially fell slightly on Wednesday evening's print, but quickly reversed course and rose more than 4% once the post-earnings conference call started and CFO Colette Kress made clear that any disappointment the buy-side may have with these results is due to capacity constraints.
Given the results, it's clear that Nvidia's stock is, as has been the case throughout its history, cheaper than it appeared on a forward earnings basis. We're reiterating our buy-equivalent 1 rating and raising our price target up to $280 from $260.
In addition to the results, Nvidia announced an expansion of its partnership with Amazon's cloud unit. The expansion will see Amazon Web Services (AWS) deploy 2 million additional Nvidia graphics processing units (GPUs) in fiscal years 2027 and 2028.
