#NVIDIAEarnings

NVIDIA After Earnings: The AI Engine Is Still Running, but the Market Has Raised the Bar
NVIDIA has delivered another quarter that makes the scale of the AI infrastructure cycle difficult to ignore. Q2 FY2027 revenue reached $96.22 billion, up 106% year over year, while adjusted EPS came in at $2.22. Data Center revenue was the standout, reaching $89.0 billion, up 117% year over year and 18% sequentially. These numbers confirm that AI infrastructure demand is still expanding at extraordinary speed.

The forward guidance is arguably even more important than the quarter that just finished. NVIDIA expects Q3 revenue of approximately $108 billion, plus or minus 2%, with gross margin around 74%. The company is therefore guiding toward another substantial sequential increase in revenue while accepting some margin pressure as the business scales.

That margin story is where the next debate begins. NVIDIA generated a 75% gross margin in Q2, but management expects approximately 74% in Q3. Supply constraints and rising component costs mean investors are now watching not only how much AI infrastructure NVIDIA can sell, but how efficiently that demand converts into profit. A small margin decline is not necessarily a problem when revenue is expanding this quickly, but expectations are extremely high.

The demand signal remains the strongest part of the thesis. NVIDIA says its AI infrastructure buildout is continuing at full speed, with demand coming from frontier AI labs, startups, enterprises, sovereign customers and other parts of the ecosystem. Reuters also reported that management expects approximately 70% revenue growth for fiscal 2028, substantially above the growth rate many investors had been expecting.

Vera Rubin adds another layer to the story. NVIDIA says the Vera Rubin platform is already ramping into full production, with systems running at partners including CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius. This matters because the growth thesis is increasingly becoming a multi-generation platform cycle rather than a story dependent entirely on Blackwell.

The AWS announcement strengthens that interpretation. NVIDIA and Amazon Web Services announced plans to deploy 2 million additional NVIDIA GPUs across AWS's global infrastructure while expanding cooperation across AI factories, networking, CPUs, open models and physical AI. That is a long-duration demand signal rather than simply another quarterly order.

China remains an important uncertainty. NVIDIA's Q3 revenue outlook assumes no Data Center compute revenue from China, meaning any future improvement in that market would represent potential upside to the current outlook rather than something already embedded in the guidance. At the same time, export restrictions make China a genuine geopolitical risk that investors cannot simply ignore.

Now look at the stock reaction. The latest available market data shows NVDA trading around $225.51, up approximately 7.56% during the August 27 session at the time of the latest quoted update. The stock opened around $222.79 and traded as high as $227.30, while the previous session closed at $209.66. That is a major repricing in a very short period and confirms that investors are responding positively to the forward growth outlook.

The technical picture has therefore changed from the $219 area referenced before earnings. $227–$228 is now the first immediate resistance zone because it overlaps the current session high and the previous August high near $227.92. A sustained move above that region would strengthen the breakout structure. The next psychological area is $230, followed by the broader $235–$236 zone.

On the downside, the first important reference is approximately $220–$222, which now sits close to the current breakout area. If buyers can defend that zone during any post-earnings pullback, the market would be showing that the earnings reaction is being absorbed rather than fully reversed. Below that, $213–$215 becomes the next meaningful support area, followed by the previous $209–$210 region.

Volume is especially important here. NVDA traded more than 143 million shares during the latest quoted August 27 session, compared with roughly 180 million shares on August 26 and 122 million on August 25. That tells us the earnings reaction is occurring with substantial market participation rather than on unusually thin liquidity.

The broader market is providing another tailwind. Reuters reported that NVIDIA's post-earnings move helped lift AI-related markets, while the Nasdaq also advanced. However, the macro backdrop is not completely risk-free: July PCE inflation remained elevated, and markets are preparing for Federal Reserve Chair Kevin Warsh's Jackson Hole speech. That means interest-rate expectations could still influence how far the AI rally can extend.

My bullish scenario is a sustained hold above $220–$222, followed by a decisive break through $227–$228 with strong volume. If that happens, $230 becomes the next psychological test, followed by $235–$236. The strongest confirmation would be a breakout followed by a successful retest of the $227 area as support.

The bearish scenario is different. If the post-earnings surge fails and NVDA loses $220, the market could begin digesting the enormous move more aggressively. A break below $213–$215 would weaken the immediate structure, while a return toward $209–$210 would indicate that investors are questioning whether the new growth expectations justify the current valuation.

The fundamental picture is therefore strong, but the technical setup is entering a higher-expectation zone.

NVIDIA has already answered one question: AI demand is still enormous.

The next question is harder: can NVIDIA continue delivering extraordinary revenue growth while protecting margins, managing supply, launching new platforms and navigating geopolitical restrictions?

At around $225.51, I would focus on three numbers: $228 for breakout confirmation, $220–$222 for near-term support, and $209–$210 for deeper structural risk.

The AI story has not weakened. If anything, the latest results have extended the runway.

But after a move of this magnitude, the market will demand more than another impressive quarter. It will demand evidence that the next stage of AI infrastructure spending can continue translating into sustainable earnings growth.

#GateSquare

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