Jensen Huang's Nvidia Guided for 70% Revenue Growth in Fiscal 2028, Far Above the 44% Wall Street Expected, as Amazon Agreed to Buy 2 Million Nvidia GPUs. Is the Growth Forecast Believable?
Key Points
Nvidia anticipates 70% year-over-year revenue growth as its Vera Rubin ramp-up continues.
Amazon's commitment to order 2 million Nvidia GPUs fuels fiscal 2028 guidance.
Revenue growth has already been accelerating and staying well above the 70% target Nvidia set for its fiscal 2028.
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It's normal for companies to offer guidance about the revenue they expect in the current year, but investors rarely receive two-year outlooks from companies. Nvidia (NASDAQ: NVDA) just broke that convention, with CFO Colette Kress telling analysts on its fiscal 2027 Q2 earnings call that Nvidia expects to deliver 70% year-over-year revenue growth in its fiscal 2028.
Kress also said that the 70% figure reflects supply constraints, and that absent the bottlenecks in the supply chain, its revenue could actually more than double year over year in fiscal 2028.
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Although it would be easy to get excited about such a forecast, investors also have to assess the likelihood of it being achieved. Surprisingly, Nvidia has a shot at doubling its sales yet again.
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Amazon boosts its chip orders
Amazon (NASDAQ: AMZN) is one of Nvidia's top customers, and its recent order of 2 million GPUs (graphics processing units) to be delivered across 2027 and 2028 adds credibility to the 2028 forecast.
Nvidia's powerful new Vera Rubin architecture, which includes both CPUs and GPUs, has started to ship, and its sales acceleration will start to show up in Nvidia's fiscal 2028 (which will begin Jan. 31, 2027).
Amazon and other tech giants expressed their excitement about the Vera Rubin platforms when Nvidia announced its kickoff in a January press release.
"Rubin will remind the world that Nvidia is the gold standard," Elon Musk said in the press release.
It isn't just Nvidia. Samsung (OTC: SSNLF) has locked in contracts for 70% of its memory chip capacity through 2031 thanks to key partnerships. A strong memory market with multiyear revenue visibility is also good for Nvidia, since its GPUs are the foundation of the AI boom.
Nvidia is still doubling its sales
It's not easy for any company to double its revenue year over year, but it's more difficult for giants that have already taken dominant shares of their core markets.
Nvidia is in that position. The entire world knows about the company's chips, and most of its sales come from the same few hyperscalers. Despite its commanding market position and sheer sales volume, the company still managed to more than double sales year over year in its fiscal 2027 second quarter, which ended July 31.
That was actually a revenue growth acceleration for a company so massive that it would be natural to expect it to have matured and settled down to low growth rates. Nvidia's revenue increased by 65% in its fiscal 2026, and sales were up by 85% year over year in its fiscal 2027 first quarter.
The 106% growth rate in its fiscal 2027 second quarter is a meaningful jump. Vera Rubin platforms are still ramping up into full production, and their sales will start to show up more meaningfully in future results. In the meantime, Nvidia's fiscal 2027 third-quarter guidance implies 12% sequential growth at the midpoint.
Strong financial results, recent growth acceleration, and the Vera Rubin rollout suggest that Nvidia can hit its ambitious target of 70% year-over-year revenue growth in its fiscal 2028.
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Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Nvidia. The Motley Fool has a disclosure policy.
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