Nvidia projects $432 billion annual revenue run rate on Q2 surge

Nvidia reported second quarter revenue growth of 106% from a year ago and projected third quarter revenue of $108 billion. That projection puts Nvidia on a $432 billion annual revenue run rate.

The company reported second quarter earnings of $59.69 billion, or $2.46 a share, on revenue of $96.22 billion, up 18% from the first quarter and 108% from a year ago. Non-GAAP earnings were $2.22 a share. Gross margins in the second quarter were 75%, up slightly from the first quarter.

Wall Street was expecting second quarter non-GAAP earnings of $2.09 a share on revenue of $92.16 billion.

CEO Jensen Huang said AI has reached an inflection point where it's doing useful work. "This time last year, one lab alone was driving the buildout; today, we have a golden age of new AI labs and startups, multiple frontier labs scaling in parallel, a thriving open-model ecosystem and physical AI coming online — with strong momentum across the U.S. and around the world. The AI infrastructure buildout is at full steam," said Huang.

He added that Vera Rubin is now in full production.

Nvidia's data center sales continued to carry the team. Nvidia's data center revenue was $89 billion, up 117% from a year ago. Free cash flow in the second quarter was $21.34 billion.

As for the outlook, Nvidia projected third quarter revenue of $108 billion, give or take 2%. GAAP gross margins will be 74%.

The company also outined its future financial commitments serving as a funding backstop. In a nutshell, Nvidia is essentially like an NFL general manager that manages the salary cap and kicks the can down the road in out years.

In prepared remarks, CFO Colette Kress said:

• "Data Center revenue for the second quarter was a record $89.0 billion, up 117% from a year ago and up 18% sequentially, driven by the ramp of our Blackwell Ultra infrastructure. Hyperscale revenue more than doubled from a year ago and increased 13% sequentially on the strength of Blackwell Ultra. ACIE revenue increased 138% from a year ago and 25% sequentially driven by end-demand from AI natives, enterprises, and sovereign customers, as well as hyperscalers utilizing AI clouds. Shipments of Data Center Hopper products to China during the quarter were less than 1% of Data Center revenue."
• "We’ve partnered with our extensive network of suppliers to secure the critical components needed to meet demand for the next several years. Our commitments increased from $119 billion last quarter to $279 billion, primarily related to the procurement of memory."
• "Securing land, power and shell for data centers has become the next critical phase in the AI infrastructure buildout. AI clouds and model makers are seeing extraordinary demand for AI infrastructure, yet many are growing faster than their balance sheets and long-term credit profiles can support. In response, we have entered into arrangements that help select customers secure the land, power and data center capacity needed to support their growth. We will focus on exceptional
  sites where visible, durable demand can support multiple generations of Nvidia compute."
• "We signed data center lease agreements with terms of approximately fifteen years that are expected to commence between fiscal year 2028 and fiscal year 2029. We expect to reassign these data center leases to third parties."