On August 6, Nova (NASDAQ:NVMI) reported second-quarter 2026 results for the three months ended June 30, and the numbers marked a new high point for the semiconductor metrology company. Revenue hit $255.0 million, up 8% from the first quarter of 2026 and 16% higher than the second quarter of 2025. GAAP net income reached $75 million, while non-GAAP net income climbed to $86.5 million. For a company built around measuring the tiniest details in chip manufacturing, the quarter itself was anything but small.
Records Piling Up Everywhere
The headline figures tell part of the story, but the breakdown underneath is where the quarter gets interesting. GAAP earnings per diluted share reached $2.20 in the second quarter of 2026, up from $2.04 in the first quarter of 2026 and $2.14 a year earlier in the second quarter of 2025. Non-GAAP earnings per diluted share went further, hitting $2.51 in the second quarter of 2026 compared with $2.33 in the first quarter of 2026 and $2.20 in the second quarter of 2025. That is back-to-back sequential growth on both a GAAP and non-GAAP basis, not just a single strong quarter against an easy comparison.
Two product lines did the heavy lifting. Nova posted record revenue from its advanced logic devices business, which it tied to the industry’s shift toward Gate-All-Around transistor architecture and rising demand for advanced process nodes. Advanced packaging solutions also hit a record, supported by capacity additions across both logic and memory manufacturing. Those are two distinct growth engines firing in the same quarter, which matters more than a single hot product line would.
Management is not treating this as a one-off. For the third quarter of 2026, the period ending September 30, Nova guided to revenue of $277 million to $287 million, GAAP diluted EPS of $2.46 to $2.61, and non-GAAP diluted EPS of $2.70 to $2.85. At the midpoint, that outlook points to another double-digit sequential jump in sales. President and CEO Gaby Waisman framed the quarter as validation of the company’s long-term plan, citing broad-based customer demand, continued market share gains, and deeper engagement across leading-edge device segments as the drivers behind what he described as increased visibility into coming quarters.
Margins Feel The Squeeze
The results were not clean across every line. Gross margin came in at 56.5% in the second quarter of 2026, down from 57.7% in the first quarter of 2026 and 57.8% in the second quarter of 2025. That is a decline on both a sequential and year-over-year basis even as revenue set records, which means the mix of what Nova sold this quarter carried lower profitability than what it sold a year ago.
Operating expenses added to the pressure, rising to $68.0 million from $64.9 million in the first quarter of 2026 and $61.6 million in the second quarter of 2025, a faster pace of increase than the business had shown in prior periods. Profit still grew because revenue outran both of those cost pressures, but the margin trend is worth watching if it continues alongside the accelerating growth Nova is guiding toward.
Wall Street Placing Its Bets
Hedge fund ownership of Nova rose to 25 funds in the most recent quarter from 22 in the prior quarter, which points to institutions adding rather than trimming exposure. Short interest sits at 5.70% of float, a level that suggests a real but contained bear camp rather than a stock under heavy attack. The stock trades at a forward price-to-earnings ratio of 24.94 as of September 4, pricing in continued growth without demanding hypergrowth to justify it.
The Real Test Still Ahead
Nova’s second quarter delivered records on revenue, GAAP profit, and non-GAAP profit at the same time margins started to slip. The bull case rests on two distinct product lines, advanced logic and advanced packaging, both hitting new highs in the same period, plus guidance that points to another double-digit jump in sales. The bear case is narrower but real: gross margin has now declined for two straight comparisons, and expenses are growing faster than they had been. For the growth story to keep working, Nova needs its third quarter guidance to land while margins stabilize rather than continue eroding.
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