Level 1 - Absolute Beginner
Nvidia is a big technology company. It makes computer chips. On August 27, 2026, Nvidia shared its money report for the last three months.
Nvidia made $96.2 billion. This is more than double what it made last year. It is also more money than experts expected.
Nvidia also said it will make even more money soon. But after the report, Nvidia's stock price went down. It fell 1.6% during the day. Then it fell 1.8% more after the market closed.
Why did the stock fall? Nvidia said its costs will go up. Memory chips cost more money now. Many AI companies want the same memory chips, so the price is rising.
- earnings
- the money a company makes in a certain period of time
- revenue
- the total money a company earns from selling things
- stock
- a small share of a company that people can buy and sell
- chip
- a small electronic part inside a computer or phone
- analyst
- a person who studies companies and predicts their money results
- forecast
- a guess about what will happen in the future
- cost
- the amount of money you must pay for something
- memory chip
- a small computer part that stores information
Level 2 - Elementary
Nvidia, the world's leading maker of AI computer chips, released its earnings report for the second quarter of fiscal year 2027 on August 27, 2026.
The company earned $96.2 billion in revenue, more than double what it earned a year earlier, and higher than the $92.2 billion that Wall Street analysts expected. Revenue from its data center business, which sells chips for artificial intelligence, grew 117% to $89 billion, also beating expectations.
Nvidia also gave a forecast for the next three months, predicting $108 billion in revenue, above what analysts predicted. CEO Jensen Huang said he expects the company's revenue to grow 70% in fiscal year 2028.
Despite all this good news, Nvidia's stock price fell 1.6% during regular trading and another 1.8% after hours. Investors were worried about rising costs for memory chips, which are pushing Nvidia's profit margin lower.
- quarter
- a three month period of a company's business year
- fiscal year
- a twelve month period a company uses for financial reporting, which may not match the calendar year
- analyst
- an expert who studies companies and predicts their financial results
- forecast
- a prediction about future results or events
- profit margin
- the percentage of revenue a company keeps as profit after costs
- investor
- a person or group that buys stock in a company hoping to earn money
- artificial intelligence
- computer technology that can perform tasks that normally need human thinking
- guidance
- a company's own prediction about its future financial performance
Level 3 - Intermediate
Nvidia, the dominant supplier of chips powering the artificial intelligence boom, posted second quarter fiscal 2027 results on August 27, 2026 that comfortably exceeded Wall Street's expectations across nearly every major metric.
Revenue reached $96.2 billion, more than double the figure from a year earlier and well above the $92.2 billion analysts had projected, while data center revenue, the segment that sells chips to companies building AI infrastructure, climbed 117% to $89 billion, itself surpassing the roughly $85 billion consensus estimate. Adjusted earnings per share came in at $2.22, ahead of the $2.10 analysts had forecast.
Looking ahead, Nvidia guided third quarter revenue to $108 billion, above the $104.2 billion Wall Street projected, a figure that notably assumes no revenue from China. CEO Jensen Huang went further still, forecasting 70% revenue growth for fiscal 2028, a projection sharply higher than what analysts had been modeling.
Yet investors reacted by selling the stock, which closed the regular session down 1.6% and slid a further 1.8% in after hours trading. The reason was Nvidia's own guidance on gross margin, which it said would bottom out at 71-72% by the fourth fiscal quarter, down from 75% in the quarter just reported. Chief Financial Officer Colette Kress attributed the squeeze to rising memory chip costs, noting that memory scarcity today is being driven in large part by the AI buildout itself, meaning demand from Nvidia's own customers for AI hardware is inflating the price of components Nvidia itself must buy.
- consensus
- the average prediction or expectation shared by a group of analysts
- guidance
- a company's own official prediction about its future financial results
- gross margin
- the percentage of revenue left after subtracting the direct cost of producing goods
- adjusted earnings per share
- a company's profit per share of stock, recalculated to exclude certain one time items
- infrastructure
- the basic physical systems and equipment needed for something to operate, such as AI data centers
- squeeze
- pressure that reduces something, such as profit
- scarcity
- a situation in which there is not enough of something to meet demand
- buildout
- the process of constructing or expanding a large system or network
Level 4 - Advanced
Nvidia's fiscal second quarter results, released August 27, 2026, delivered the kind of numbers that would ordinarily send a stock soaring: revenue of $96.2 billion, more than double the year earlier period and well clear of the $92.2 billion Wall Street had penciled in, with data center revenue, the engine of the company's AI dominance, surging 117% to $89 billion against a roughly $85 billion consensus. Adjusted earnings per share of $2.22 likewise cleared the $2.10 analysts expected.
The company's forward guidance was, if anything, more striking still. Nvidia pointed to third quarter revenue of $108 billion, comfortably ahead of the $104.2 billion consensus and notable for assuming zero contribution from China, while Chief Executive Jensen Huang projected 70% revenue growth for fiscal 2028, a figure sharply above what analysts had previously modeled and a reminder of how thoroughly the company has rewritten expectations for the pace of AI infrastructure spending.
And yet shares fell, closing the regular session down 1.6% before shedding a further 1.8% in after hours trading, a reaction that on its face seems difficult to square with a fifteenth consecutive quarter of beaten estimates. The explanation lay not in what Nvidia earned but in what it now expects to spend: the company guided gross margin to bottom out at 71-72% by the fourth fiscal quarter, down from the 75% just reported.
Chief Financial Officer Colette Kress located the cause in a feedback loop of the company's own making, telling investors that memory scarcity today is being driven in large part by the AI buildout itself, a dynamic in which the same explosive demand fueling Nvidia's growth is simultaneously bidding up the price of the memory components it must purchase to build its own chips. That the size of Nvidia's earnings beats has been narrowing, even as the headline figures remain enormous, appears to be sharpening investors' attention to precisely this kind of margin pressure.
- consecutive
- following one after another without interruption
- dominance
- a position of control or leading strength over others in a field
- feedback loop
- a cycle in which the effects of a process influence and reinforce the process itself
- infrastructure spending
- money invested in building the physical systems, such as data centers, needed to support an industry
- headline figures
- the main, most prominently reported numbers in a report
- margin pressure
- a strain on a company's profitability caused by rising costs or falling prices
- penciled in
- tentatively estimated or projected, as if written in pencil to allow for later change
- consensus
- the collective expectation or average estimate agreed upon by analysts