Nvidia anticipates a 70% increase in revenue for its next fiscal year ending January 2028, signaling strong continued demand for AI computing technology despite ongoing supply challenges.
- 70% revenue growth forecast for fiscal 2028
- Supply shortages limit faster expansion
- AI labs and cloud partners drive diversified demand
What happened
On Wednesday, Nvidia announced an ambitious 70% revenue growth forecast for its fiscal year ending January 2028. This outlook surpasses analyst expectations and reflects expanding AI computing needs from hyperscalers, enterprises, sovereign buyers, and industrial customers. Nvidia’s impressive second-quarter results, including over $89 billion in data center revenue, reinforce the company’s dominant position in the AI hardware market.
Despite this strong demand, Nvidia cautioned that memory and component shortages will continue constraining how rapidly it can scale operations. The company also revealed progress on its next-generation Vera Rubin processors, which have started shipping and are expected to make up about 20% of data center revenue in the current quarter.
Why it matters
Nvidia’s guidance reassures investors that the AI investment boom is far from tapering off, with AI technology driving substantial revenue growth at scale. CEO Jensen Huang’s comments that AI is now 'productive and profitable' highlight a turning point where AI compute translates directly into business revenue, emphasizing the strategic importance of Nvidia’s chip technology in this ecosystem.
The company’s partnerships, such as with Amazon Web Services for expanded GPU deployment, along with the growth of neo-cloud providers, signal that AI adoption is broadening beyond traditional tech giants to more diverse market segments. However, ongoing supply chain challenges and margin pressure from soaring memory prices underscore the operational risks in meeting this burgeoning demand.
What to watch next
Market focus will remain on Nvidia’s ability to manage supply constraints while ramping up Vera Rubin platform shipments and fulfilling growing orders from AI labs like OpenAI. Investors will closely track quarterly revenue and margin trends, especially around guidance for the third and fourth fiscal quarters where margins are expected to dip due to higher component costs.
Nvidia’s uncertain business outlook in China will also be critical. While US export licenses have permitted some chip sales to major Chinese tech firms, delivery pace remains slow. How Nvidia navigates the evolving regulatory environment and demand in this major market region will influence its growth trajectory and competitive positioning in Asia.