- Nvidia share price rallies in premarket after stellar Q2 FY2027 results that beat revenue growth expectations.
The Nvidia share price rose in after-hours trading on Wednesday, 26 August, after the company reported strong Q2 FY2027 numbers. Nvidia reported a 106% year-on-year revenue increase, reaching $96.2 billion. This was also an 18% jump quarter-on-quarter. Data center revenue drove the growth, rising to $89.0 billion, up 117%.
The company also provided positive guidance on Q3 revenue, targeting $108 billion plus or minus 2% with a ~74.0% gross margin (±50bps). This is well above the market consensus of $104.2 billion. GAAP EPS came in at $2.46, with a gross margin of 75.0% year-over-year. Options imply a ~5.4% one-day move. The numbers exceeded Wall Street’s expectations.
The company also unveiled its DSX for AI factory design, BioNeMo Agent Toolkit, and CUDA‑X updates. The company also announced plans for new partnerships and financing worth over $500B in third‑party capital.
| Metric | Q2 FY27 | Market expectation |
|---|---|---|
| Revenue | $96.2bn | ~$92.2bn |
| Data Center revenue | $89.0bn | ~$85.1bn |
| Adjusted EPS | $2.22 | ~$2.10 |
| Q3 revenue guidance | $108bn ±2% | ~$104.2bn |
Nvidia’s share price initially closed 0.06% lower the day before the earnings call. However, it has ticked up and now trades at $217.74 as of this writing, up 4.7%.
Why is the Nvidia Share Price Rising?
Why is the company’s stock trading higher, given that investors no longer view AI companies solely through the prism of strong earnings, but also by whether earnings growth outpaces capex?
1. Revenue May Finally Be Outpacing the Capex
Look at the numbers. Nvidia is no longer just registering earnings in the $30 billion to $40 billion range. The company’s revenue base has jumped dramatically, and it is now doing nearly $100 billion in sales on a quarterly basis. All this while delivering triple-digit year-on-year growth. The earnings ramp, in both monetary terms and percentage growth, has definitely caught investors’ attention.
2. Data Centers: The Key Growth Engine
Data centers were the key driver of the company’s revenue. The $89 billion revenue from data centres of beat market expectations of $85 billion. It also accounted for 92% of the company’s total Q2 FY2027 revenue and delivered triple-digit year-on-year growth (117%). This strongly confirms that capex on AI infrastructure and hyperscaler spending is starting to yield results, with increased demand for the company’s accelerated computing infrastructure.
3. Strong Q3 Guidance
The forward guidance of $108 billion in Q3 revenue (±2%) beat the market’s $104.2 billion expectation. This indicates the company’s strong belief that AI demand is not declining anytime soon and will keep ramping up to drive higher revenues. It matters because the market’s consensus numbers already priced in outsized growth.
Nvidia Share Price: Technical Outlook
The current premarket price of 224.88 sits between the 211.04 support and the 17 August high of 227.66, the next resistance level. A break of this resistance opens the door to the all-time high at 236.03 in the near term. A Fibonacci tool trace from the 30 March low to 14 May high identifies the 27% Fibonacci extension at 255.90 as the next upside target if the bulls uncap 236.03.
Conversely, failure to break past 227.66 supports a retrace to the 211.04 support. Below this level, the next downside target is 199.63, the 50% Fibonacci retracement and the 10 June low. The 191.83 support and Fibonacci retracement at the 61.8% level become the target of choice if the bears take out 199.63.