On August 26, discussing NVIDIA Corporation (NASDAQ:NVDA), Mad Money host Jim Cramer said investors should “own it, do not trade it,” as he noted:
What exactly does NVIDIA need to do to impress this market? Tonight, we got that answer because when the world’s largest company reported, it was a magnificent top and bottom-line beat, both sales and earnings more than doubling year-over-year, and management saying they expect 70% revenue growth in the 2028 fiscal year. That’s the next one. That’s incredible. Just incredible. Oh, initially, the stock sold off, but then it started soaring… After a quarter, that only takes it to $219; are you kidding? I can’t believe where this stock can go, and I’m so glad that I still believe “own it, do not trade it.”
NVIDIA’s Fiscal Q2 2027 Earnings Report
NVIDIA Corporation (NASDAQ:NVDA) reported fiscal second-quarter 2027 revenue of $96.2 billion, up 106% from a year earlier. Data center revenue reached $89 billion, up 117%. The company expects fiscal third-quarter 2027 revenue of $108 billion, plus or minus 2%, with gross margins of 74%, plus or minus 50 basis points. Management also projects approximately 70% revenue growth for fiscal 2028. The longer-term forecast matters because the company is signaling that demand can remain strong beyond the current product cycle. CEO Jensen Huang said demand is accelerating, while NVIDIA said its next-generation Vera Rubin platform is already in full production.
Bear Case
The biggest risk is that NVIDIA Corporation’s (NASDAQ:NVDA) growth eventually slows while expectations remain elevated. Supply constraints support the demand story, but they also limit how quickly the company can convert orders into revenue. Meanwhile, higher memory costs are pressuring margins. NVIDIA’s gross margin was 75% in the second quarter, and management expects 74%, plus or minus 50 basis points, in the third quarter. CFO Colette Kress said gross margins are expected to bottom at 71% to 72% in the fourth quarter before recovering in fiscal 2028. Competition is a longer-term risk. Amazon, Alphabet and Microsoft are developing custom AI accelerators that could reduce NVIDIA’s share of workloads handled internally. If hyperscaler spending moderates or more workloads shift to proprietary chips, NVIDIA could face slower growth even while overall AI spending continues to expand.
Moreover, the company is also taking on larger commitments to secure the infrastructure needed to support its growth. Its supply agreements rose to $279 billion in the latest quarter from $119 billion three months earlier, while future commitments for cloud services, leases, equity investments and capital expenditures reached $143 billion. The company also has a payment obligation capped at $105 billion under residual-value guarantees tied to leases supporting an OpenAI data-center project. Those commitments are manageable while demand remains strong, but they increase the financial consequences of a downturn.
Hedge Fund Positioning and Short Interest
Institutional positioning remains supportive. Insider Monkey’s tracking of more than 1,000 hedge funds shows 285 hedge fund holders in Q2, up from 275 in Q1. Fisher Asset Management was the most prominent hedge fund shareholder tracked by Insider Monkey and held nearly 91 million shares in the quarter. Short interest remains low, with it standing at 1.23% of the public float.
For Cramer, the latest results support the case for holding NVIDIA Corporation (NASDAQ:NVDA) rather than trading around individual earnings reports. The question is now whether the company can sustain approximately 70% revenue growth in fiscal 2028 while managing supply constraints, rising costs, custom-chip competition, and its growing financial commitments to the AI infrastructure cycle.
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