Nvidia shares surged 6.7% to $223.71 on Thursday, August 27, after the world’s most valuable company projected 70% revenue growth for next fiscal year. The upbeat long-term guidance and stronger-than-expected quarterly results signaled to global markets that the artificial intelligence infrastructure boom remains robust despite supply bottlenecks.
The chipmaker’s latest financial disclosure offered a much-needed anchor for investors who had watched the stock fall nearly 12% from its May peak amid mounting questions over whether high capital expenditures from major cloud customers would generate sustainable returns. Instead of signaling a plateau, management delivered a rare multi-year forecast that quickly rippled across global semiconductor markets, sending AI-linked stocks higher in Europe and China and offering fresh ammunition to bulls. Reporting was led by Rashika Singh and Kanishka Ajmera in Bengaluru, with editing by Mrigank Dhaniwala.
Strong Quarterly Numbers and Long-Term Guidance
For the second quarter, the company reported revenue of $96.2 billion, outperforming Wall Street expectations and driven largely by $89 billion in data center sales. Looking ahead to the current quarter, management forecast sales above Wall Street estimates.
The market reaction was swift. Following the results, at least 10 brokerages raised their price target on the shares, according to data compiled by LSEG, while the pre-market rally put Nvidia on track to add about $340 billion to its market value.
“70% growth supply constrained is a remarkable figure, and to the extent possible we would expect Nvidia to continue to knock down barriers to higher growth.”
Analysts at Morgan Stanley
The forecast marked a rare long-term outlook from Nvidia, with CEO Jensen Huang saying AI had reached an inflection point
as the technology moves from experimentation to real-world deployment.
Broadening Demand and Cloud Provider Expansion
Nvidia signaled that AI demand is spreading beyond hyperscalers, citing growth from AI labs, rising capacity among neo-cloud providers such as CoreWeave (CRWV.O) and Nebius (NBIS.O), and a deeper partnership with Amazon Web Services. Shares of CoreWeave and Nebius rose 5.8% and 7.2%, respectively. Morgan Stanley analysts said that Nvidia’s push into cloud revenue-sharing could become a fresh catalyst for the stock.
This demand parallels ongoing infrastructure investments across the broader technology sector tracked by GuruFocus. Microsoft, a software and cloud-computing company, forecast approximately $175 billion in reported capital spending during calendar 2026. Although that figure was below an earlier estimate, Microsoft said an accounting change affecting data-center leases did not alter its underlying expansion plans. Microsoft separately disclosed $329.1 billion in data-center leases scheduled to commence between fiscal 2027 and 2033, illustrating the longer-term infrastructure commitments associated with cloud computing and artificial intelligence.
Meanwhile, Meta Platforms (NASDAQ:META), a social-media and digital-advertising company, increased the lower end of its 2026 capital-expenditure forecast, producing a range of $130 billion to $145 billion. Meta expects approximately seven gigawatts of computing capacity this year and 14 gigawatts next year. NVIDIA’s processors are widely used to train and operate AI models, making hyperscaler capital expenditure an important indicator of potential chip demand. Microsoft’s reported spending forecast and Meta’s maximum projection together reach $320 billion, although not every dollar will flow to processors or NVIDIA.
Valuation Context and Remaining Market Questions
Despite its dominant position supplying processors for data centers, the stock trades at 17.9 times forward earnings estimates, well below Advanced Micro Devices’ (AMD.O) 37.2 times and Intel’s (INTC.O) 46.2 times. Nvidia shares rose approximately 1.6% in Thursday’s regular-session trading as investors assessed continuing infrastructure investment from major cloud customers.
Yet, key questions linger across the broader sector. Investors may now focus on whether other cloud providers report comparable infrastructure commitments and whether greater computing capacity produces sufficient revenue to sustain future spending. Customer deployment schedules could influence Nvidia’s sales growth even if aggregate AI budgets remain elevated, while the company continues navigating supply bottlenecks and financial ties with customers.
