To The Moon

After a nerve-wrecking wait, $NVIDIA(NVDA)$’s Q2 2027 earnings were finally released.

They did not disappoint.

Interestingly, NVDA has:

• Recorded a 7-day losing streak thru Monday.

• Rebound marginally on Tuesday.

• Fell again, on Wednesday by -1.59%, prior to earnings released after US market close. (see below)

NVDA reported better-than-expected (a) fiscal second-quarter results and (b) issued estimates’ topping revenue guidance.

As a result, the stock jumped +4% on the company’s forecast for next fiscal year.

Q2 2027 Earnings.

Below are company’s actuals versus analysts’ consensus, according to LSEG.

• Earnings per share (adjusted): was $2.22 vs Wall Street’s forecast of $2.10 vs Q2 2026’s $1.05; that’s +111.43% YoY gain. (see below)

• Revenue: was $96.22 billion vs Wall Street’s forecast of $92.17 billion vs Q2 2026’s $46.74; that’s +105.86% YoY growth. (see below)

• Revenue from data centers, NVDA’s largest source of sales, rose by +117%, to $89 billion.

• Net income: came in at $59.7 billion; that is a +126% YoY gain.

Futures Guidance.

Prior to NVDA’s Q2 2027 earnings release, Wall Street consensus modeled Q3 2027:

• Revenue at $103.9 billion.

• Earnings per share (adjusted) at $2.37. This represents roughly +82% YoY growth.

Below is NVDA’s current quarter’s guidance & outlook:

Q3 2027 Revenue:

• Projected to be $108.0 billion (±2%), toppling Wall Street consensus estimates of around $103.9 – $104.0 billion.

• This would be the first time NVDA exceeds $100 billion revenue, in a quarter.

Fiscal Year 2028 Outlook:

• Long-term forecasts shared after earnings show that revenue is expected to grow by about +70% in Fiscal 2028.

• This implies sustained momentum across enterprise AI demand, that are investors’ current concerns.

The Big Picture.

NVDA has been widely considered a bellwether for the health of the broader AI economy.

However, of late, it has been trailing the broader semiconductor sector in market gains.

• The stock even ticked downwards initially in extended trading following earnings report as investors maintained high expectations for the AI darling.

• NVDA jumped after CFO, Colette Kress, delivered the revenue projection during earnings call.

• Kress said the company remains "supply constrained", otherwise it could double revenue next year.

Circular Financing.

NVDA's earnings report comes after (a) a string of investments and capital maneuvers designed to boost the AI economy and (b) bolster its customer base, including a recent deal to backstop an OpenAI data center. (see below)

CEO’s address.

The investments have called attention to concerns about a circular financing risk in the AI economy, that CEO Jensen Huang had readily dismissed:

• During the earnings conference call, Huang addressed market’s concerns - saying he was "delighted" for NVDA to invest in frontier AI labs.

• He even called it a "once-in-a-generation opportunity" and said, "the only regret is he did not invest more & sooner".

CFO’s address.

• CFO stated that the company recognizes the scale of this support and knows some will call it circular financing, though NVDA sees it differently.

• Without identifying companies by name, she added that these are once-in-a-generation companies with proven (1) technology leadership, (2) skyrocketing customer traction, and usage, and that the company expects them to become the largest technology companies in history.

• CFO Kress also added that NVDA would go further, hinting at plans to "provide selective credit enhancement for nearly two gigawatts (GW) of compute" for yet another frontier AI lab.

Technical Analysis.

Post Wed, 26 Aug 2026 quarterly earnings, CEO Jensen Huang’s net worth jumped by roughly $15.6 billion in a single day, bringing his total personal fortune to $196.8 billion.

Just like that, Huang overtook both $Meta Platforms, Inc.(META)$ Zuckerberg and $Oracle(ORCL)$ Ellison to become the 8th richest billionaire.

Is NVDA's Thu, 27 Aug 2026 recovery just a short-lived fluke, or is it here to stay ?

For that I will defer to its latest technical indicators of (1) Simple Moving Averages of 20-day, 50-day & 200-day, (2) MACD and last but not least (3) RSI.

Simple Moving Average (SMA).

On Thu, 27 Aug 2026, NVDA closed at $227.98 per share, that is above its 3 SMAs - (a) 20-day ($217.21), (b) 50-day ($208.16), and (c) 200-day ($195.73).

The upward alignment of all 3 SMAs in textbook order of (20 > 50 > 200) confirms a strong, sustained bullish trajectory across short, medium, and long-term timeframes.

MACD.

Both MACD line (2.48) and Signal line (2.96) traded well above the Zero line. This indicates that long-term momentum remains firmly under bullish control, keeping the overall price trend positive.

However, the MACD line sits slightly below the Signal line, resulting in a negative Divergence of -0.48. This reflects a short-term loss of upward momentum or consolidation.

In short, this suggests that while the broader trend is bullish, price velocity has recently cooled off.

RSI.

Its 4-day RSI sits at 61.32, residing in healthy bullish territory without crossing the traditional overbought threshold (>70).

This indicates clear buying interest and room for further upside before encountering overbought resistance.

Time to Buy ?

Based on NVDA's latest technical indicators, it is clearly a good time to add NVDA stock to a portfolio.

However, recent news indicates the market's focus is shifting from revenue growth to whether NVDA can defend its profit margins.

It is a valid concern as (a) memory chips continue to be in short supply and (b) memory costs continue to rise and (c) newer system architectures become a larger share of sales.

To understand the market’s concern, there is a need to backtrack a little.

Gross Margin indicator.

NVDA’s latest Q2 FY2027 gross margin was an exceptional 75.0% on both GAAP and non-GAAP basis:

• Comparatively speaking, it’s up YoY from Q2 2026’s 72.4% (GAAP) and 72.5% (non-GAAP) respectively.

• An improvement of +2.6% and +2.5%, respectively.

• With $96.2 billion in revenue, NVDA earned $72.1 billion in GAAP gross profit. This shows that its pricing power and product mix remain strong despite rapid growth.

Margins matter.

The YoY expansion is particularly notable because revenue more than doubled, rising +106%, while Data Center revenue rose +117% to $89.0 billion.

NVDA did not sacrifice profitability to growth, unlike some of its Mag 7 peers.

It successfully converted a bigger portion of each revenue dollar into gross profit.

This suggests that demand for its AI systems (including Blackwell & Vera Rubin platforms) remained stronger than competitive and supply-side pressures.

Gross margin stayed nearly unchanged from Q1 2027’s 74.9%, even with an +18% QoQ boost in revenue.

The stability shows the shift to newer, more complex AI platforms has not hurt unit profits.

The Critical caveat.

The main concern is not Q2's margin, but where future margins are headed.

For Q3 2027, NVDA projected gross margin at 74.0% (±0.5%), is down about -1.0% from Q2 despite expected revenue of $108 billion.

So far, management’s outlook excluded Data Center revenue from China. This means the guidance is based on demand elsewhere and it remains robust.

Implicitly, investors are being asked to accept slightly lower profitability on incremental sales.

Reports following NVDA’s earnings indicate that (1) rising memory and component costs are expected to pressure margins further.

For Q4 2027, management did signal a potential low point around 71 – 72%.

For a hardware business, a decline to that range would still be extraordinarily profitable.

However, it is a big deal for NVDA because its high stock price and growth expectations rely heavily on keeping those ultra-high profit margins.

The Bottom Line.

Latest earnings confirmed that NVDA’s core AI franchise remains highly profitable with margins:

• Improving year over year.

• Held steady quarter over quarter.

• Generated gross profit at an unprecedented scale.

Now that market has decided to shift its focus from revenue to gross margin, the next few quarters will test whether the projected compression is (1) a temporary transition cost or (2) the beginning of a more durable normalization in NVDA’s profitability.

More importantly, market expectations remain remarkably stringent when measuring performance metrics.

When actual results fail to meet analysts’ expectations, share prices typically adjust downward and swiftly without hesitation. Agree ?

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• Do you think NVDA has handed in a stellar Q2 2027 earnings report card ?

• Do you think NVDA will be able to maintain its ‘high’ gross margin for the coming 2 years with supply chain challenges persisting for the memory & storage sector ?

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