On August 27, Nvidia (NASDAQ:NVDA) shares jumped 6.8%, adding roughly $295.7 billion in market value in what looked like its best single trading day since June. The move came a day after the chipmaker did something it rarely does: it handed investors a long-term revenue forecast instead of just its usual quarterly guidance, pointing to a 70% jump in sales for the next fiscal year. After a year of doubts about whether the artificial intelligence spending boom still had legs, Nvidia just answered the question with a number too big to ignore.
A Growth Engine Still Accelerating
Nvidia’s fiscal second quarter, reported August 26, gave little room for the skeptics. Its revenue more than doubled to $96.2 billion, a 106% increase from the prior-year period, while gross margin widened to 75% from 72.4% a year earlier. Operating income climbed 124% to $63.7 billion, and adjusted earnings per share rose 120% to $2.22. Guidance for the current quarter calls for around $108 billion in sales, which would mark an 89.5% increase from a year ago, and Nvidia expects hyperscale capital spending across the industry to near $800 billion this year and $1.3 trillion the year after.
The bigger question heading into the quarter was whether hyperscalers building their own AI chips would start buying less from Nvidia. Amazon’s Andy Jassy and Alphabet’s Sundar Pichai have both said otherwise, insisting that custom silicon and continued Nvidia purchases can coexist. Amazon Web Services recently committed to buying two million more Nvidia GPUs over the next two years, and Jensen Huang has said the arrangement could extend to millions of CPUs as well. That growth feeds Nvidia’s newest business line, standalone CPUs built on its Rubin platform, which the company expects to generate $20 billion this fiscal year and more than double that the year after.
Nvidia’s balance sheet is doing quiet work of its own. The company holds $80.6 billion in cash, including a $63.4 billion stock portfolio that grew 250% in a single quarter, far outpacing the S&P 500’s 14.9% gain, helped along by a new $21 billion stake in SpaceX, whose Elon Musk has said his company will build exclusively on Nvidia’s Vera Rubin architecture.
The Doubts That Still Linger
Not every worry evaporated. Nvidia trailed rival chip stocks for most of 2026, gaining just 12% heading into this week, weighed down by concerns that Big Tech’s data center spending could slow and by questions about Nvidia’s own habit of investing in companies that then turn around and buy its chips, a pattern some see as inflating AI valuations rather than reflecting purely organic demand. OpenAI and other customers building in-house chips as alternatives to Nvidia hardware have added to that pressure.
Nvidia’s own investment book carries risk too. Intel and SpaceX now make up 75% of that $63.4 billion portfolio, at 44.2% and 30.9% respectively, and SpaceX is widely viewed as overvalued, trading near $139 a share, just above its $135 IPO price. A stumble in either name would leave a mark on Nvidia’s own books.
What The Smart Money Sees
Hedge fund ownership of Nvidia rose to 285 funds last quarter from 275 the quarter before, a sign institutional conviction is building rather than fading. Short interest sits at just 1.23% of float, showing little organized skepticism in the stock. Nvidia trades at 23.92 times forward earnings as of August 28, only modestly above the broader information technology sector’s 20.9x average, a multiple that looks reasonable given revenue growth still running well past 100% a year. That mix of rising ownership, thin short interest, and a still moderate multiple suggests the market has room left to keep believing the story.
Where The Real Test Lies
Nvidia has now done what quarterly beats alone could not: convince the market that AI spending has years left to run. For the bulls, that means a rare multiyear forecast, a hyperscaler base that keeps buying even as it builds its own chips, and a fast-growing CPU line still in its early innings. For the bears, the concentration in Nvidia’s own investment bets and its role in financing some of its own demand remain open questions.
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