NVIDIA Stock (NVDA) and Earnings: What Drives the Chipmaker

What does NVIDIA sell, and why is its stock so closely watched?

NVIDIA Corporation, headquartered in Santa Clara, California, was incorporated in April 1993 ^[4]. It describes itself as a data center scale AI infrastructure company whose technology stack rests on the CUDA development platform, which runs on all NVIDIA GPUs, plus hundreds of software libraries and tools ^[4]. Its products range from AI systems for data centers to graphics processors for PCs and workstations ^[2].

The stock is closely watched for two reasons. First, its results are read as a measure of spending on AI infrastructure: in the quarter to 26 July 2026, Data Center revenue was about 93% of the total ($89.0 billion of $96.2 billion) ^[1]. Second, it is one of the largest holdings in broad index funds; on 2 November 2026 NVIDIA was 7.52% of the SPDR S&P 500 ETF Trust, second only to Apple ^[9].

This guide is general information drawn mainly from NVIDIA's SEC filings. It is not investment advice and does not suggest buying, selling or holding NVDA.

How does NVIDIA make money?

NVIDIA reports two segments: Compute & Networking, which includes Data Center platforms and automotive, and Graphics, which includes GeForce GPUs and workstation graphics ^[4]. In Q2 fiscal 2027, Compute & Networking revenue was $88.3 billion and Graphics revenue was $7.9 billion ^[2].

It also reports revenue by market platform ^[2]:

• Data Center: $89.0 billion, split between Hyperscale ($48.7 billion) and AI Clouds, Industrial & Enterprise ($40.3 billion) ^[2].
• Edge Computing: $7.2 billion, driven by Blackwell workstations and partly offset by slower consumer PC sales, which the company said were tempered by elevated memory and systems prices ^[2].

NVIDIA does not make its own chips. It uses foundries such as Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung for wafers, buys memory from SK Hynix, Micron and Samsung, and relies on contract manufacturers for assembly and testing ^[4]. Its fiscal year ends in late January, so fiscal 2027 runs roughly from February 2026 to January 2027 ^[3][4].

What did NVIDIA's latest earnings show?

NVIDIA reported results for Q2 fiscal 2027, the quarter ended 26 July 2026, on 26 August 2026 ^[1]. Revenue was $96.2 billion, up 18% from the previous quarter and 106% from a year earlier ^[1]. GAAP and non-GAAP gross margins were both 75.0% ^[1].

GAAP diluted earnings per share were $2.46 and non-GAAP were $2.22 ^[1]. GAAP earnings were higher than non-GAAP partly because of $7.8 billion of net gains on equity securities in the quarter, which the non-GAAP measure excludes ^[2]. Investors should keep that in mind when comparing GAAP earnings over time, because investment gains can swing from quarter to quarter.

For the full fiscal year 2026, which ended on 25 January 2026, revenue was $215.9 billion, up 65%, and net income was $120.1 billion ^[4].

What is the outlook?

For Q3 fiscal 2027 NVIDIA guided to revenue of $108.0 billion, plus or minus 2%, and gross margins of 74.0%, plus or minus 50 basis points ^[1]. It said it is not assuming any Data Center compute revenue from China in that outlook ^[1]. The company will hold its call on the third quarter on Tuesday 17 November 2026 at 2 p.m. PT (5 p.m. ET) ^[6].

What drives NVIDIA's stock price?

NVIDIA's annual report states plainly that its operating results have fluctuated and may fluctuate in the future, and that if they fall below the expectations of securities analysts or investors, the stock price could decline ^[4]. That sentence explains most earnings-day moves: the share price reacts to results and guidance relative to what was already expected, not to growth alone.

Demand from a few very large buyers

Revenue is concentrated. In Q2 fiscal 2027 one direct customer accounted for 16% of total revenue, and in the first half three direct customers accounted for 16%, 15% and 13% ^[3]. NVIDIA also estimates that one AI research and deployment company contributed a meaningful amount of revenue by buying cloud services from its customers ^[3]. Changes in spending plans at a handful of buyers can therefore move expectations for the whole company.

Supply and commitments

NVIDIA says it is experiencing certain supply constraints as it ships both Blackwell and the new Vera Rubin systems ^[3]. Its purchase and other commitments rose from $119 billion to $279 billion in one quarter, mainly for memory, and total future commitments were $366 billion as of 26 July 2026 ^[2]. Large commitments secure supply but create risk if demand slows.

China and export rules

The US government granted licences allowing small amounts of H200 products to be shipped to specific China-based customers, but the company says such sales were restricted by the Chinese government ^[3]. It took a $0.4 billion charge on H200 inventory and purchase obligations in the first half of fiscal 2027, and those shipments were less than 1% of Data Center revenue in the latest quarter ^[3].

What recent deals and obligations matter to shareholders?

Two filings from the summer of 2026 show how far NVIDIA now reaches beyond selling chips.

• SB Energy and the Ohio campus: on 17 August 2026 NVIDIA entered residual value guaranties on leases for about 4.25 gigawatts of IT load at a data center campus in Pike County, Ohio, with an OpenAI affiliate as tenant ^[8]. Its payment obligation for the initial commitment is capped at $105 billion; under the agreements NVIDIA pays a shortfall if a trigger event occurs, such as the tenant's insolvency leading to a lease default or its failure to make lease payments, and OpenAI has agreed to reimburse NVIDIA for any amounts it actually pays ^[8].
• Hugging Face: on 2 September 2026 NVIDIA agreed to acquire Hugging Face, an open-source model platform, for about $11.9 billion plus a retention programme of up to about $1.0 billion; closing is expected in the first half of 2027, subject to regulatory approvals ^[7].

Cash returned to shareholders

In Q2 fiscal 2027 NVIDIA returned about $26.0 billion through buybacks and dividends and had about $99.0 billion left under its repurchase authorisation ^[1]. On 18 May 2026 it raised its quarterly dividend from $0.01 to $0.25 per share ^[3]. Future dividends depend on the board's decisions ^[3].

What are the main strengths and risks in NVIDIA's own filings?

Strengths shown in the numbers

• Revenue more than doubled year over year in Q2 fiscal 2027, to $96.2 billion ^[1].
• Gross margins of 75.0% ^[1].
• A software platform, CUDA, that runs across all its GPUs ^[4].

Risks the company lists

• Competition could hurt market share and results ^[4].
• Long manufacturing lead times and uncertain supply, combined with demand estimates that may be wrong, can cause mismatches between supply and demand ^[4].
• Dependence on third-party suppliers reduces control over quantity, quality, yields and delivery ^[4].
• Laws, regulations and political actions, including export restrictions, may hurt the business ^[4].
• A concentration of sales to a limited number of customers, partners and distributors ^[4].
• Issues relating to the responsible use of its technologies, including AI, may cause reputational or financial harm ^[4].

How do you read an NVIDIA earnings report?

1. Start with revenue against guidance. For Q3 fiscal 2027 the guided range is $108.0 billion plus or minus 2%, roughly $105.8 billion to $110.2 billion (this guide's arithmetic from ^[1]).
2. Check Data Center and its split. Hyperscale versus AI Clouds, Industrial & Enterprise shows who is buying ^[2].
3. Compare GAAP and non-GAAP earnings. Equity-investment gains can make GAAP earnings jump ^[2].
4. Read the next-quarter outlook. The guidance usually matters as much as the results, given the company's own warning about expectations ^[4].
5. Look at customer concentration and China notes in the 10-Q. These sit in the notes and risk factors, not in the press release ^[3].

A note for readers in Iran

US sanctions rules prohibit US persons from exporting services to Iran, including services whose benefit is received in Iran ^[10]. A brokerage account run by a US firm for a person in Iran would be such a service, so it is prohibited unless authorised under those rules ^[10]. This is general information, not legal advice.

What should investors watch on 17 November 2026?

The third-quarter report is scheduled for 17 November 2026 ^[6]. The first number to check is revenue against the $108.0 billion guidance; then gross margin against the 74.0% guidance ^[1]. Other items to check are comments on the ramp of Vera Rubin, which the company said began production shipments in the third quarter of fiscal 2027 ^[3], and for any change in China sales ^[3].

Valuation sets the bar. At the 2 November close of $202.06 ^[5], about 24.1 billion shares outstanding ^[3] imply roughly $4.9 trillion of market value, and trailing four-quarter GAAP diluted earnings of about $7.91 per share imply a price-earnings ratio of about 25.5 (this guide's arithmetic from ^[4], ^[3] and ^[5]). Over the 52 weeks to 3 November the shares traded between $164.27 and $243.37 ^[5].