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Nvidia

The AI factory buildout, Fiscal 2027

Now, compute is revenue
Jensen Huang, founder and CEO, on the second quarter of fiscal 2027

The AI factory buildout

Nvidia’s revenue in the quarter to July 2026 was $96.2 billion, up 106% in a year and 18% in a quarter, with Data Center at $89.0 billion. It expects $108.0 billion next quarter. Its plan is to sell whole platforms, from processors and networking to racks and software, to a wider set of customers than the biggest clouds, and to commit to supply, sites, and financing well ahead of the demand it sees.

$ buildout --part 1

The platform

  1. [1]Vera RubinRamp the Vera Rubin platform into full production, with racks running at CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure, and Nebius.
  2. [2]Agents and inferenceBuild for agents and inference, with the Vera CPU, the first CPU built for AI agents, and the Groq 3 LPX inference accelerator, in full production.
  3. [3]NetworkingSell networking with the compute: Spectrum-6 switch systems, with pluggable and co-packaged optics, and BlueField-4 STX for agentic storage.

✓Data Center revenue rose 117% in a year and 18% in a quarter, to $89.0 billion in the second quarter.

✓Gross margin rose to 75.0% from 72.4% a year earlier, and Blackwell was still the vast majority of revenue.

✓Data Center networking revenue rose 199% in a year to $14.8 billion in the first quarter, under the earlier way of reporting.

$

Revenue has risen every quarter since the start of fiscal 2026

Revenue rose from $44.1 billion to $96.2 billion, and Nvidia expects $108.0 billion in the quarter ending October 2026. Each blade is $4 billion.

$44.1bnQ1 FY26to April 2025$46.7bnQ2 FY26to July 2025$57.0bnQ3 FY26to October 2025$68.1bnQ4 FY26to January 2026$81.6bnQ1 FY27to April 2026$96.2bnQ2 FY27to July 2026$108.0bnQ3 FY27outlook, ±2%
  • Data Center
  • Edge Computing
  • Not split on the current basis
  • Outlook

Nvidia changed how it reports its markets in the first quarter of fiscal 2027, to Data Center and Edge Computing, and recast the quarters it shows. The third quarter of fiscal 2026 was reported before then, so it has no split. Outlook figures are Nvidia’s, and assume no Data Center compute revenue from China.

Half of Data Center revenue now comes from beyond the largest clouds

Nvidia says one lab alone drove the buildout a year ago, and that many labs, startups, clouds, companies, and countries drive it now. Its revenue from the two groups it reports has moved from 59% and 41% towards half each.

Q2 FY26to July 2025$24.2bn$16.9bn$41.1bnQ1 FY27to April 2026$43.0bn$32.2bn$75.2bnQ2 FY27to July 2026$48.7bn$40.3bn$89.0bn
  • Hyperscale: public clouds and the largest consumer internet companies
  • AI Clouds, Industrial, and Enterprise
  • The half

Second-quarter revenue grew 102% from a year earlier for Hyperscale and 138% for the other group. The shares of the whole are worked out. Earlier quarters are recast for a company Nvidia moved from the second group to the first, which is why the first quarter here differs from the split first reported.

$366 billion of commitments made ahead of demand

Nvidia says securing land, power, and shell has become the next critical phase of the buildout. It has committed to buy parts, capacity, and cloud services years ahead, and to lease sites that others will use.

$366bn

in all, by fiscal year, as at 26 July 2026

$120bnRest of FY27$100bnFY28$98bnFY29$16bnFY30$10bnFY31$22bnFY32 and after
  • Supply and capacity$279bn
  • Cloud service agreements$29bn
  • Data center leases not commenced$25bn
  • Equity investments$25bn
  • Capital expenditures$8bn

Amounts are in billions of dollars, rounded as Nvidia gives them. Separately, Nvidia has land, power, and shell guarantees for AI cloud partners with a maximum gross exposure of $3.5 billion, and up to $105 billion for the Ohio campus.

  1. Sell the whole system, and measure the parts.

    Nvidia sells processors, networking, systems, and software as one platform, and reported networking separately as it grew from $3.0 billion to $11.0 billion in a year. We recommend delivering a plan as one whole to customers while tracking each part on its own, so you can see which part is pulling the rest.

  2. Widen the customer base before the first one slows.

    Hyperscale was about half of Data Center revenue in the first quarter, and the other half came from AI clouds, industry, enterprises, and countries. AI Clouds, Industrial, and Enterprise revenue grew 138% in a year. We recommend counting how concentrated your revenue is by customer type every quarter, and setting a share you are working towards.

  3. Put a number on what you are committing to.

    Nvidia lists its commitments by kind and by year, $366 billion in all, and shows guarantees with their maximum exposure, $108.5 billion. We recommend that any plan that commits a company to spend ahead of demand say the total, the schedule, and the worst case, in one table.

Sources

  1. 1. NVIDIA Corporation (2026). NVIDIA announces financial results for second quarter fiscal 2027. News release, Form 8-K exhibit 99.1, 26 August 2026. sec.gov
  2. 2. NVIDIA Corporation (2026). CFO commentary on second quarter fiscal 2027 results. Form 8-K exhibit 99.2, 26 August 2026. sec.gov
  3. 3. NVIDIA Corporation (2026). CFO commentary on first quarter fiscal 2027 results. Form 8-K exhibit 99.2, 20 May 2026. sec.gov
  4. 4. NVIDIA Corporation (2026). CFO commentary on fourth quarter and fiscal 2026 results. Form 8-K exhibit 99.2, 25 February 2026. sec.gov

Headwater is not connected with NVIDIA Corporation. NVIDIA, CUDA, Blackwell, Vera Rubin, and Spectrum are trade marks of their owners. Updated 28 September 2026.

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