Nvidia Set to Report Record Q2 Earnings Amid Rising Memory Costs and AI Demand
Nvidia is preparing to release its fiscal second-quarter 2027 results on August 26, with Wall Street anticipating unprecedented figures. Analysts project revenue of approximately $92 billion and an adjusted EPS of $2.09, reflecting a staggering 97% year-over-year growth. The company itself has guided for around $91 billion in revenue, excluding data-center compute revenue from China.
A major concern for Nvidia is the rising cost of memory. According to TrendForce, server DRAM contract prices surged between 53-58% quarter-over-quarter in Q2 2026. This increase in high-bandwidth memory and DRAM costs from suppliers like SK Hynix, Samsung, and Micron has led Nvidia to inform customers that AI server prices will rise by over 15% for configurations shipping in early 2027.
Nvidia's CEO, Jensen Huang, described the company's demand trajectory as “parabolic,” with a staggering $119 billion in supply commitment backlog. The company aims for $1 trillion in cumulative revenue from its Blackwell and Vera Rubin platforms by the end of 2027. In the previous quarter, Nvidia reported a record revenue of $81.6 billion, with data center revenue alone reaching $75.2 billion, marking a 92% year-over-year growth.
The upcoming earnings call will need to address the impact of rising HBM and DRAM prices on Nvidia's gross margin target of 75%. The company's ability to maintain pricing power with hyperscaler customers, who are scrutinizing their AI infrastructure investments, will be crucial in the coming quarters. Nvidia's earnings are seen as a barometer for the broader AI ecosystem, with any margin compression potentially affecting the entire AI supply chain.
Updated 17:01 UTC
New Insights on Nvidia's Upcoming Earnings
A Goldman Sachs flow expert has highlighted notable de-risking in tech markets ahead of Nvidia's Q2 FY2027 earnings report. Currently, US large-cap mutual funds are underweight Nvidia by approximately 100 basis points, making it the largest underweight position among major AI-related stocks. Other companies like AMD, Alphabet, and Microsoft also face underweight positions, indicating a broader skepticism among fund managers.
This trend of de-risking accelerated during June and July 2026, with market participants reducing both gross and net exposures across tech and AI sectors. Goldman Sachs views Nvidia's upcoming earnings report as a significant market catalyst, especially given the large number of funds underweight the stock.
Goldman Sachs maintains a Buy rating on Nvidia with a price target of $285, citing tight supply conditions and potential upside. Additionally, Nvidia has announced partnerships with major firms to mobilize over $500 billion for AI infrastructure financing, potentially backing 25% of these deals, amounting to around $125 billion.
The sequencing of this de-risking could lead to aggressive reactions from fund managers, either positively or negatively, depending on Nvidia's earnings results. A strong performance could prompt a broader reevaluation of tech stocks, while disappointing results may validate the cautious stance of underweight fund managers.
Updated 17:34 UTC
Latest Developments
- Nvidia is expected to report approximately $92 billion in quarterly revenue for Q2 2027, a 96% increase year-over-year.
- The July Personal Consumption Expenditures report indicated headline inflation steady at 3.7% year-over-year, slightly above the 3.6% consensus estimate.
- Core PCE inflation remained unchanged at 3.3%, influencing expectations for a potential rate hike by the Federal Reserve in September.
- Current futures contracts reflect a 42% to 44% probability of a rate hike at the Fed's September meeting, indicating market uncertainty about future monetary policy.
- Nvidia's earnings report is seen as a critical indicator for tech sentiment as the broader tech sector shows resilience amid inflation concerns.
FAQ
When is Nvidia expected to report its fiscal second-quarter 2027 results?
Nvidia is set to release its fiscal second-quarter 2027 results on August 26.
What revenue and EPS figures are analysts projecting for Nvidia's Q2 earnings?
Analysts project Nvidia's revenue to be approximately $92 billion with an adjusted EPS of $2.09, reflecting a 97% year-over-year growth.
What is the impact of rising memory costs on Nvidia's pricing strategy?
Due to rising high-bandwidth memory and DRAM costs, Nvidia has informed customers that AI server prices will rise by over 15% for configurations shipping in early 2027.
What was Nvidia's revenue in the previous quarter?
In the previous quarter, Nvidia reported a record revenue of $81.6 billion, with data center revenue alone reaching $75.2 billion, marking a 92% year-over-year growth.
How does Nvidia's earnings impact the broader AI ecosystem?
Nvidia's earnings are seen as a barometer for the broader AI ecosystem, and any margin compression could potentially affect the entire AI supply chain.
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