Nvidia’s 70% growth call thrills investors but revives AI financing fears

Nvidia’s 70% growth call thrills investors but revives AI financing fears
Nvidia has delivered the kind of forecast that can reset a market overnight: 70% revenue growth next fiscal year. The catch is that its AI boom is now so vast—and so financially interconnected—that the numbers have sharpened, rather than ended, the debate over risk.

On Wednesday, the chipmaker reported fiscal second-quarter revenue of $96.2 billion, up 106% year over year and above Wall Street expectations. Data-center revenue reached $89 billion, underscoring that AI infrastructure remains the engine of Nvidia’s expansion.

The stock initially wavered after the release, then rallied after Chief Financial Officer Colette Kress laid out the unprecedented year-ahead outlook. Nvidia expects 70% annual sales growth in fiscal 2028—far beyond the roughly 44% analysts had modeled—and projected $108 billion, plus or minus 2%, for the next quarter.

Jensen Huang framed the surge as a structural shift, not a speculative frenzy. “AI has reached its inflection point. It’s doing useful work. Its tokens are productive and profitable. Now, compute is revenue,” he said, adding: “And demand is accelerating.” Kress argued that the demand base is widening beyond the handful of hyperscalers: sovereign AI projects, enterprise customers and AI-native cloud providers together are expected to account for roughly half of data-center business.

Yet Nvidia’s own disclosures show why skeptics remain alert. The company has invested in AI labs, supported data-center partners and reported $108.5 billion in maximum gross guarantee exposure. Kress acknowledged the criticism directly: “We recognize the scale of this support, and we know some will call this circular financing. We see it differently.” Nvidia says independent capital still evaluates each deal and insists its exposure is limited; critics see an ecosystem in which the chip supplier is helping finance the customers buying its chips.

Supply is the other brake. Huang said Nvidia can confidently deliver 70% growth even though demand is higher, because “our entire supply chain is challenged.” Elon Musk, meanwhile, amplified research claiming Nvidia’s contribution to US growth is being undercounted—evidence of how the company’s earnings have become a proxy battle over AI’s broader economic value.

Continue reading https://foxvector.com/stories/01a04564-950d-31f8-7383-05be7eee2def