Nvidia predicts a 70% increase in sales the following year, suggesting that the spike in AI expenditures will continue
Nvidia announced Wednesday that it expects a 70% increase in revenue for the next fiscal year, highlighting strong demand for AI computing and warning that memory component shortages will continue to slow its expansion.
Shares of the chipmaker rose nearly 5% in after-hours trading, after falling more than 1% at the start.
“AI has reached its tipping point. It’s doing useful work. Its tokens are productive and profitable. Now, computing is revenue,” said Nvidia CEO Jensen Huang.
Investors who have questioned how long the spike in AI spending can persist after years of rapid growth are likely to feel reassured by these expectations. Nvidia contends that the AI computer market is expanding rather than peaking. Despite supply constraints limiting how much business it can acquire. By projecting revenue growth well beyond Wall Street projections and outlining demand from major tech businesses as well as AI labs.
Executives presented a growth strategy for the upcoming years, which included boosting sales at AI laboratories like OpenAI and increasing the company’s next-generation Vera Rubin processors.
The chipmaker usually doesn’t disclose such estimates, so Nvidia’s prediction of 70% growth in its upcoming fiscal year, which ends in January 2028, is an uncommon admission.
Nvidia CEO Jensen Huang
«We have never forecast or guided a year in advance,» Huang said. Before Wednesday’s results, analysts, on average, projected 44% revenue growth over the same period.
Nvidia began introducing its new Vera CPU to Chinese customers in June. Informing them that the chip could be available by August, as China separately considered allowing major AI companies limited H200 purchases.
Last month, a US Commerce Department official said shipments had begun but remained “very few.”
Nvidia’s second-quarter revenue more than doubled to $96.22 billion, beating estimates of $92.17 billion. Adjusted earnings were $2.22 per share in the three months ended July 26, versus estimates of $2.10.
