Nvidia was set to announce its fiscal second-quarter results after market close on Wednesday, with the semiconductor company representing a key bellwether for the artificial intelligence sector. Wall Street analysts had projected revenue growth of 97% to $92.1 billion for the quarter, marking the company’s largest year-over-year increase in two years and its fourth consecutive quarter of accelerating revenue expansion.
The company faced elevated expectations heading into the earnings report. Analyst expectations showed a pattern of decelerating growth rates, with projections of 82% revenue growth for the current quarter and 44% for all of fiscal 2028, suggesting the market anticipated a slowdown from the recent acceleration. Nvidia had successfully beaten earnings estimates in each of the prior four quarters, though the margins of victory had been modest, ranging between 3% and 6%. Additionally, five analysts had raised their earnings expectations for the quarter within the preceding month.
Historical trading patterns presented an unusual dynamic for the company heading into the report. Over the previous year, Nvidia shares had declined in the days immediately following each of its last four earnings announcements, despite the company delivering bottom-line beats, accelerating revenue growth, and raised guidance. These declines had typically persisted for a week or longer. However, the stock had recovered prior to each subsequent quarterly update, though this pattern would not repeat before the next earnings announcement. The stock had delivered a 23% return over the past year, a performance that trailed several smaller competitors and other artificial intelligence-related businesses.
The company traded at a valuation of 24 times fiscal 2027 earnings and 16 times fiscal 2028 estimates, which analysts characterized as reasonable for a company growing substantially faster than peers. Key risks facing the business included supply chain constraints, potential storage manufacturing shortages, growing concerns about data center expansion, and questions about the sustainability of capital expenditures being budgeted for artificial intelligence initiatives. CEO Jensen Huang’s comments during the earnings presentation were expected to receive significant market attention amid these considerations.
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