Nvidia Corporation (NASDAQ: NVDA) reported $96 billion in revenue for the second quarter, more than doubling the year-earlier figure. President Donald Trump praised the results as "incredible numbers," adding that such success happens "only in America." The stock rose 8.69% to $227.81 on Thursday.

CEO Jensen Huang added that he is "100% confident" frontier AI labs will remain Nvidia customers despite their push for custom chips. The Santa Clara-based chipmaker faces a new constraint in its AI infrastructure buildout. While demand remains overwhelming supply, rising input costs are beginning to erode profitability. CFO Colette Kress stated that memory price increases have exceeded prior expectations and are projected to rise further into next year.

Margin Pressure from Memory Inflation

Nvidia’s gross margins, which stood at 75% in the second quarter, are expected to decline sequentially. The company forecasts margins of 74% in the third quarter before falling to the 71%–72% range in the fourth quarter. DA Davidson analyst Gil Luria estimated the key financial indicator will fall to 71.5% in the fourth quarter before leveling out at 72.5% in fiscal 2028.

This deterioration marks the first significant margin contraction of the current AI cycle. The pressure stems from high-bandwidth memory (HBM), a critical component for Nvidia’s accelerators. Suppliers including Micron Technology Inc. (NASDAQ: MU), SK Hynix Inc. (NASDAQ: SKHY), and Samsung Electronics are benefiting from this scarcity, which Nvidia attributes largely to the AI buildout itself.

Kress described the situation as "extreme pricing conditions in memory," noting that the magnitude of the price increase has exceeded prior expectations. This creates a unique dynamic where the same demand surge driving Nvidia's revenue growth is inflating the cost of its key components. Memory has become the fastest-inflating line item in the bill of materials for an AI server, meaning some of the scarcity working in Nvidia's favor for demand is now working against it on costs.

Fiscal 2028 Outlook and Pricing Strategy

Looking ahead, Nvidia expects fiscal 2028 revenue to grow approximately 70%. This growth is constrained by supply limits, as CEO Jensen Huang noted that unconstrained demand would be significantly higher, growing about 100% next year.

To offset rising memory costs, Nvidia plans to raise prices. However, these increases will not take effect until fiscal 2028. Consequently, margins will absorb the cost shock in the near term before recovering as higher prices are passed on to customers. This timing gap means investors must accept lower profitability while growth accelerates, with margins expected to recover only after the new pricing takes hold.

Analyst Reaction: Demand, Geopolitics, and Valuation

Yorkville Research managing director Dan Ives highlighted the company’s 2028 guidance of 70% year-over-year growth, stating the press release was so strong it deserved to be displayed in the Louvre art museum. Ives noted that the results put concerns about circular financing and guidance to rest, emphasizing that "the biggest thing is demand."

Ives estimates the current demand-to-supply ratio for chips is 12-to-1, adding fuel to the broader tech rally. He described the earnings as the "Super Bowl" for the sector due to their scale and importance.

Regarding geopolitical dynamics, Ives pointed out that Nvidia’s guidance assumed no data center compute revenue from China. "This is without China, that’s what’s unbelievable," he said. Ives reiterated that for the first time in 30 years, the US holds the lead over China in advanced AI chips, a talking point he has maintained since January.

Other analysts also revised their outlooks positively:

• Wedbush analyst Matt Bryson raised the price target from $330 to $345, noting the guidance provides "a year of visibility." He highlighted that the FY28 revenue growth of ~70% was supply-bound.
• Rosenblatt analyst Kevin Cassidy raised the price target from $325 to $390, calling the results a "second NVIDIA moment." Cassidy noted the guidance crushes the 45% consensus estimate.
• KeyBanc analyst John Vinh maintained an Overweight rating with a price target of $330, highlighting the solid exceedance of expectations for the third quarter.
• DA Davidson analyst Gil Luria reiterated a Buy rating with a price target of $300, stating the new guidance provides "more visibility than ever."
• Benchmark analyst Cody Acree reiterated a Buy rating with a price target of $335, noting shares traded roughly 5% higher after hours due to the higher-than-expected FY28 revenue outlook.

Acree noted that the 70% revenue growth implies around $690 billion ahead of a Street consensus estimate of $573.5 billion. He stated that valuation remains conservative relative to the peer group.

Huang Addresses Custom Chip Competition

As leading AI developers race to build their own custom chips, Jensen Huang says he remains unfazed. Responding to questions about OpenAI, Anthropic and other frontier AI labs designing in-house silicon, Huang said he is "100% confident" they will remain Nvidia customers and partners "for a very long time."

Speaking during Nvidia’s earnings call, Huang argued that many custom AI processors are designed for narrow inference workloads, while Nvidia offers a broader platform spanning the entire AI lifecycle.

"We’re building something very different," Huang said. "These XPUs are inference specific chips for one cloud or one service. NVIDIA Corp is a platform, an entire AI factory platform that spans the entire AI life cycle."

He added that as AI services expand globally, they will continue to rely on Nvidia’s infrastructure beyond their own data centers. "I fully expect… they’re going to run on NVIDIA Corp all around the world," Huang said.

Huang also framed Nvidia’s investments in frontier AI companies as a long-term strategic opportunity rather than a competitive risk. "Investing in these companies are once in a generation opportunity," he said. "The only regret that I have is that I didn’t invest more and sooner."

Political Context and Tariff Uncertainty

President Donald Trump celebrated wins for the U.S. chip industry, citing Nvidia’s robust revenue guidance and Micron Technology Inc.’s new $10 billion research investment as proof that his policies are drawing in trillions in domestic investment. Trump called Micron one of the "hottest" companies in the world, noting its additional investment builds on a previous $250 billion commitment to U.S. manufacturing.

However, tariff uncertainty looms over the industry. The Trump administration is considering new semiconductor tariffs that could extend to laptops, gaming consoles, and data center servers. Tech companies have started lobbying against the proposal, warning it could raise costs and slow the AI data center buildout. Micron is currently the only U.S.-based manufacturer of high-bandwidth memory, a component the administration has framed as central to domestic AI supply chain security.

Trump’s earlier disclosure filed in May showed more than a dozen separate Nvidia transactions during the first quarter of 2026, including purchases and sales ranging from $1,001 to $1 million, along with several Micron purchases ranging from $1,001 to $250,000. In his most recent disclosure earlier this month, he sold between $15,001 and $50,000 of Nvidia stock on June 23, with no Micron transactions reported during that period.

What the Numbers Show

The divergence between revenue growth and margin guidance highlights a structural shift in the AI supply chain. While Nvidia continues to capture massive top-line growth, its ability to retain all associated profits is being challenged by component suppliers. The gap between the 75% Q2 margin and the 71%–72% Q4 guidance illustrates how input inflation can outpace pricing power in the short term, even for a market leader with overwhelming demand. Analysts view this margin sacrifice as a strategic move to strengthen customer economics and supply conversion, driving fiscal 2028 EPS materially higher despite the temporary pressure.

Nvidia Corp (NASDAQ: NVDA) shares rose 8.7% on Thursday, lifting CEO Jensen Huang’s net worth to $196.1 billion. The surge followed the company’s second-quarter results and optimistic fiscal 2028 guidance.

Huang’s wealth increased by an estimated $14.9 billion in a single day, making him the top gainer among billionaires according to Forbes real-time data. This jump propelled him into sixth place on the Forbes Billionaires List, overtaking Meta Platforms Inc CEO Mark Zuckerberg ($195.6 billion) and Oracle Corp co-founder Larry Ellison ($193.6 billion).

Stock Performance Drives Wealth Gain

Nvidia stock closed at $227.98, approaching its all-time high of $236.54. Huang owns an estimated 3% of the semiconductor giant. The 8.2% increase in his stake value reflects the market’s positive reaction to the company’s earnings report and forward-looking statements.

While Zuckerberg saw a decline of $2.3 billion in his net worth on Thursday, Ellison added $2.4 billion. Michael Dell remains ahead of Huang in fifth place with $243.4 billion, having gained $3.2 billion during the same period.

Guidance Fuels Investor Optimism

Investors reacted strongly to Nvidia’s unofficial guidance for fiscal 2028 revenue, which is projected to grow 70% year-over-year. Analysts noted that growth could exceed 100% if not for supply constraints. This outlook prompted several analysts to raise price targets, signaling confidence in continued explosive growth for the company.

Although shares dipped initially after the quarterly results release, the subsequent conference call provided clarity on supply dynamics and demand, reversing the early negative sentiment.

What the Numbers Show

The correlation between Nvidia’s stock performance and executive wealth is stark. Huang’s $14.9 billion daily gain represents a significant concentration of wealth tied directly to equity valuation. With a 3% ownership stake, even modest percentage moves in the stock price translate into billions in absolute dollar terms, highlighting the high beta nature of founder-led tech valuations during earnings cycles.