Nvidia's latest earnings broke a pattern of four consecutive post-earnings selloffs, with shares jumping about 7% in premarket trading Thursday after the company delivered not only a quarterly beat but an unusually strong growth outlook. The chipmaker reported quarterly revenue of $96.2 billion, up 106% year over year, while data center revenue reached $89 billion, a 117% increase from the prior-year period and above the $86.33 billion analysts expected. More importantly, Nvidia projected 70% revenue growth for fiscal 2028, far above the 45% growth expected by analysts polled by FactSet.
CEO Jensen Huang emphasized that demand is running ahead of supply. 'Even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%,' Huang said on the conference call. CFO Colette Kress said supply commitments across Nvidia's supply, infrastructure and partner ecosystems rose from $119 billion last quarter to $279 billion, with much of the increase related to memory procurement. Gross margin remained at 75% for the second consecutive quarter, but Nvidia expects it to fall to 74% in the current quarter and bottom between 71% and 72% in the fourth quarter, partly because of higher memory prices.
That memory constraint became a catalyst for SanDisk. SanDisk stock jumped nearly 5% in Thursday premarket trading after closing Wednesday at $1,499.37, up 1.3%, and gaining 3.7% after hours. Investors treated Nvidia's warning as evidence that tight memory industry conditions may persist. Bernstein analyst Mark Newman called SanDisk's High Bandwidth Flash technology a 'game changer for AI and the memory industry' and maintained an Outperform rating with a $3,000 price target. JPMorgan's Harlan Sur resumed coverage with an Overweight rating and a December 2027 target of $2,250, citing eight long-term customer agreements representing about $94 billion in total contract value at floor pricing. SanDisk and Kioxia have also announced plans to invest more than $31 billion in Japan through 2032 to expand production.
Wall Street's broader response reinforced the AI optimism. At least 10 brokerages raised price targets on Nvidia, according to LSEG data. Morgan Stanley described the 70% supply-constrained growth forecast as 'remarkable.' Goldman Sachs raised its 12-month target to $300 from $285, Citigroup to $315 from $300, and Cantor maintained a $350 target. Nvidia returned a record $26 billion to shareholders through dividends and buybacks and still has about $99 billion available for repurchases. The company's filing also disclosed $33.5 billion in senior notes and a $25 billion commercial paper program, with $15 billion of debt due within one to five years, but the growth outlook and memory-driven pricing power overshadowed those concerns.
