Nvidia Revenue Set to Hit $400 Billion Amid AI Infrastructure Boom
Nvidia reported Q2 revenue of $96.2 billion, up 106% year-on-year. Driven by massive AI infrastructure demand, the company expects annual revenue to reach $400 billion despite rising memory chip costs.
Nvidia's financial figures have long transcended those of a traditional semiconductor firm. By expanding from processors into networking, software, computing systems, and strategic AI investments, the company is not only supplying the artificial intelligence revolution but actively financing and shaping its ecosystem.
Nvidia recently reported its financial results for the second quarter of fiscal year 2027 (which ends in late January). Revenue reached $96.2 billion, a 106% increase compared to the same quarter last year, with Q3 revenue projected at $108 billion. Following the report, Nvidia's market capitalization peaked at $5.5 trillion before settling at $5.24 trillion.
Expanding the Data Center Footprint
Nvidia is rapidly broadening its portfolio from GPUs to complete data center infrastructure. In December 2025, Nvidia acquired key technologies from Groq, specifically its LPU architecture designed for high-speed AI inference, in a deal valued at $13 billion in cash and $4 billion in future payments.
Additionally, Nvidia announced the acquisition of Hugging Face for $11.9 billion in cash and $1 billion in stock options. These acquisitions position Nvidia to capture the shifting demand from model training to inference execution.
Financial Outlook and Valuation
For the current fiscal year, Nvidia's revenue is projected to reach $400 billion, representing an 85% year-on-year increase. The company forecasts an additional 70% growth for fiscal year 2028, aiming for $680 billion in revenue. Sales growth remains constrained primarily by manufacturing capacity and supply shortages rather than demand.
While gross margin stood at 75% in the first half of the year, it is expected to decline to 71%-72% by the fourth quarter due to surging prices for High Bandwidth Memory (HBM). Nvidia CFO Colette Kress stated:
"We are experiencing extreme pricing conditions in the memory market. The scale of price increases has exceeded our prior expectations, and we expect prices to rise even further next year."
With an estimated non-GAAP net profit of $218 billion for the current year, Nvidia's forward P/E ratio stands at approximately 24. Looking ahead to next year's projected net profit of $370 billion, the forward P/E drops to 14, which appears conservative relative to the company's growth rate.
Strategic Investments and Global Operations
Nvidia holds $99 billion in equity investments in other companies, with an additional $25 billion committed to future investments. Notable holdings include 122.8 million shares in SpaceX (following its merger with Elon Musk's xAI) valued at $17 billion, and 214.8 million shares in Intel worth approximately $20 billion.
Out of Nvidia's 42,000 global employees, approximately 6,000 are based in Israel. This local division, which expanded rapidly following the 2020 acquisition of Mellanox, plays a major role in Nvidia's networking, chip design, and software engineering operations.
