Nvidia’s US$108 billion outlook keeps the AI trade alive — but rising costs are the next test
How to Trade Nvidia tock in Australia
Nvidia has given markets a fresh reason to believe the AI infrastructure boom still has room to run.
The company reported quarterly revenue of US$96.22 billion, up more than 100% from a year earlier and ahead of Wall Street expectations near US$92.17 billion. Data Centre revenue climbed 117% to US$89 billion, while adjusted earnings of US$2.22 per share also beat forecasts.
More importantly, Nvidia forecast US$108 billion in revenue for the current quarter, above consensus estimates of about US$104.19 billion. It also took the unusual step of forecasting roughly 70% revenue growth in the fiscal year ending January 2028, well above analysts’ previous expectations for 44% growth.
For Australian traders, the result shifts the AI debate. The question is no longer whether demand for Nvidia’s chips remains strong. The numbers answer that clearly. The next question is whether supply shortages, rising memory costs and increasingly high expectations can limit the gains from that demand.
Nvidia’s result says AI spending is broadening, not slowing
Nvidia’s outlook matters because it offers one of the clearest reads on the enormous spending plans of Amazon, Microsoft, Alphabet, Meta and the wider AI industry.
The company said demand is extending beyond the major cloud companies. AI labs, enterprise customers, governments and industrial businesses are becoming more important buyers of AI computing capacity. Nvidia expects AI labs to account for about a quarter of its business next year.
That helps counter one of the market’s central concerns: that a small group of hyperscalers could eventually slow their data-centre spending after the first major buildout.
Nvidia’s partnership with Amazon Web Services is particularly important. The companies plan to deploy another 2 million Nvidia GPUs across Amazon’s global infrastructure over 2027 and 2028. That gives the market a concrete sign that major customers are still planning for capacity growth well beyond the current reporting season.
The AI trade now has a supply problem, not a demand problem
The result was not without a meaningful warning. Nvidia said shortages of memory components and higher component costs would limit how quickly it can expand. It expects gross margins to fall to roughly 71%–72% in the fiscal fourth quarter, from about 74% in the current quarter.
That does not undermine the demand story. In one respect, it confirms it: customers are still trying to secure more AI capacity than the supply chain can currently deliver.
But it changes the focus for traders. Nvidia can keep producing exceptional revenue growth while still facing pressure on profitability as advanced memory, packaging and other components become more expensive.
This is particularly relevant for companies across the AI supply chain. Semiconductor and memory names may benefit if demand remains tight, while the broader technology sector must weigh Nvidia’s revenue strength against the possibility that rapidly rising infrastructure costs eventually pressure customer returns.
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Vera Rubin is already becoming the next growth driver
Nvidia’s current Blackwell systems remain central to the AI buildout, but investors are already looking ahead to its next platform, Vera Rubin.
The company said Vera Rubin has begun shipping to customers and is expected to account for about one-fifth of Data Centre revenue in the current quarter. That matters because Nvidia needs to keep customers upgrading as AI workloads become larger and more complex.
A successful transition gives Nvidia a way to extend its growth beyond the first wave of demand for Blackwell. It also reinforces the company’s position as more than a supplier of individual processors. Its strategy increasingly combines GPUs, CPUs, networking, software and rack-scale systems.
That broader offering is one reason Nvidia believes it can keep growing even as Amazon, Alphabet and other large technology groups develop more in-house chips for selected workloads.
China remains the unresolved upside risk
One notable limitation remains: Nvidia did not include China Data Centre revenue in its outlook.
Washington has cleared a number of Chinese firms to buy Nvidia’s H200 chip, but shipments have remained limited and the commercial path is still uncertain. China was once a major market for Nvidia, so any clearer route to sales would represent potential upside to the company’s current forecast.
But uncertainty also creates risk. Chinese customers are continuing to develop and adopt domestic alternatives, while US export restrictions can change the economics of supplying the market at short notice.
For now, Nvidia’s guidance shows it does not need China to deliver extraordinary growth. That is reassuring for the core AI narrative, but it also means investors should treat any China progress as a separate catalyst rather than part of the base case.
What could move Nvidia and the Nasdaq next?
Nvidia has answered the immediate demand question. The market’s attention can now move to whether that demand translates into sustained returns for Nvidia, its customers and the wider technology sector.
Margin guidance: Rising memory and component costs may become the key issue after the revenue beat.
Vera Rubin deployments: The pace of customer adoption will help shape expectations for 2027 and beyond.
AI customer spending: Further capex updates from Amazon, Microsoft, Alphabet and Meta will test Nvidia’s long-term outlook.
Memory and packaging supply: Continued shortages could limit sales, even with demand accelerating.
China policy: Any increase in H200 shipments or change in export restrictions could alter revenue expectations.
US bond yields: Higher yields can still pressure technology valuations, even when earnings remain strong.
Nvidia’s result gives the AI trade a stronger fundamental foundation than it had before the report. Yet it also raises the bar again. Investors will now want proof that the next stage of AI spending can remain profitable as the systems become more expensive to build.
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Nvidia’s earnings can influence semiconductor shares, major US technology companies and the Nasdaq 100 well beyond the initial market reaction.
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1. Why did Nvidia’s earnings matter to the wider market?
Nvidia is a major supplier of AI computing systems to cloud companies, AI labs and other data-centre operators. Its stronger-than-expected revenue and outlook suggest that AI infrastructure spending remains strong, which can influence semiconductor shares and the Nasdaq 100 more broadly.
2. What was the key takeaway from Nvidia’s result?
The strongest signal was not just the quarterly revenue beat. Nvidia forecast US$108 billion in current-quarter revenue and about 70% growth in fiscal 2028, indicating that it expects AI demand to remain strong beyond the current reporting season.
3. Why are Nvidia’s margins now important?
Nvidia said higher memory and component costs would pressure gross margins as it scales supply. Strong demand can support revenue growth, but investors will watch whether those costs reduce the profitability of future AI-chip sales.
4. Can traders take a view on Nvidia or the broader AI sector?
Eligible Mitrade clients can trade Nvidia CFDs or the Nasdaq 100, depending on whether they want to take a company-specific or broader AI-sector view. CFDs allow long and short positions, but leverage can magnify both gains and losses.
Disclaimer: The content presented above, whether from a third party or not, is considered as general advice only. CFD trading involves significant risk of loss. Past performance does not guarantee future results. This article serves informational purposes only and does not constitute financial advice. Consider your risk tolerance before trading.
