NVIDIA's latest financial report once again shocked the market, with management forecasting a revenue increase of over 70% in FY 2028, far exceeding Wall Street's 45% consensus expectation. Multiple institutions, including JPMorgan Chase, Goldman Sachs, and Bernstein, have expressed bullish views, with some analysts boldly predicting that NVIDIA's revenue could reach $1 trillion in FY 2029, stating that it is "not impossible." The upcoming next-generation chip platform Vera Rubin is about to enter mass production, and demand is accelerating amidst supply constraints. The current guidance may be a conservative estimate. NVIDIA has once again surprised the market with better-than-expected performance, presenting a future outlook that is forcing Wall Street to reassess.
During the latest earnings conference call, the company revealed that the revenue growth for the fiscal year ending January 2028 may exceed 70%, well above FactSet's previous market consensus of about 45%. This forward-looking guidance was described by TD Cowen analyst Joshua Buchalter as a "potentially significant catalyst for the stock price," leading to an 8.7% surge in NVIDIA's stock price on Thursday — marking the largest single-day gain since May 2024. By the end of the day, NVIDIA's market capitalization rose to $5.49 trillion, a one-day increase of $441.5 billion, making it the second-largest single-day market cap gain in the company's history.
Of particular note, some analysts have set their sights even further. In a research report, Raymond James analyst Simon Leopold stated that achieving $1 trillion in revenue by the fiscal year ending January 2029 "seems possible" for NVIDIA, while FactSet's market consensus for that year as of Wednesday was less than $750 billion.
70% Growth Guidance: Conservative Forecast Amid Supply Constraints
NVIDIA's management clearly stated during the earnings conference call that the 70% growth forecast has already taken supply constraints into account, and the actual number would be higher without these limitations. JPMorgan Chase also noted that although the performance guidance has far exceeded expectations, it may still be a conservative estimate. The company explicitly characterized the current stage as a "supply-constrained" state, and if the supply is unconstrained, the actual demand pace would be significantly higher.
Goldman Sachs analyst James Schneider believes that if NVIDIA continues to collaborate with tech companies to advance data center construction and further bridge the gap between customer demand and supply, the company is poised to outperform the guidance in FY 2028.
In terms of gross margin, NVIDIA expects some compression for the remainder of the current fiscal year, but also anticipates that the gross margin will stabilize in the 72% to 73% range for the next fiscal year. Simon Leopold believes that while this level is lower than recent peaks, it is sufficient to dispel the market's pessimistic concerns. He pointed out that considering the rise in memory chip prices and intensified competition in custom chips, this guidance range is "better than worst-case scenario expectations."
The Rubin Platform and Ecosystem Moat: A Multiplier Growth Engine Takes Shape
Meanwhile, Buchalter interprets this guidance as a "strong signal of NVIDIA's confidence in its own business visibility," against the backdrop of the company's new-generation chip platform Vera Rubin commencing mass production and shipment. Vera Rubin is NVIDIA's next-generation AI chip platform following Blackwell.
Bernstein analyst Stacy Rasgon stated that NVIDIA's July quarter performance "should remind investors why they hold this stock." In his research report, he noted, "Demand is accelerating, and this trend coincides with the Rubin platform becoming NVIDIA's 'largest upcoming product cycle' in history."
Rasgon also emphasized that NVIDIA's balance sheet is becoming a "moat as equally important as its technology." The company not only locks in customers worth tens of billions of dollars in value through equity investments and revenue-sharing agreements but also can "support and enhance the ecosystem around its products."
Simon Leopold believes that in terms of revenue contribution, Vera Rubin chip revenue is expected to account for approximately 20% of data center revenue in the third quarter. At the same time, Groq 3 LPX has reached full production, with large-scale shipments set to begin later this quarter, and emerging cloud service provider Nebius being an early adopter. The ramp-up speed of Rubin and LPU capacities is faster than previous model predictions, leading to upward revisions of related estimates.
Simon Leopold further pointed out that NVIDIA's progress in the CPU business has also exceeded expectations. Grace CPU's rolling revenue over the past twelve months has exceeded $5 billion, and the next-generation product Vera CPU is currently in full production. Based on order status, NVIDIA's CPU business has achieved an annualized revenue of $20 billion. With ongoing supply improvements, CPU revenue for the 28th fiscal year is expected to more than double.
Wall Street Still Divided between Bulls and Bears, but Bulls Gain More Chips
Despite NVIDIA's strong performance boosting bullish confidence, market divergence has not been completely eliminated. Buchalter acknowledged that NVIDIA's strategy of providing financing support to ecosystem partners is "unlikely to convince the bears," but he himself holds a "constructive" view on the continued diversification of AI infrastructure spending and NVIDIA's position as a "core enabler."
Overall, Buchalter believes that this earnings report "scores more for the bulls," and bluntly stated that NVIDIA's stock price is "clearly undervalued." Schneider from Goldman Sachs added that this outlook "may alleviate investors' concerns about high capital expenditure costs."
Analysts expect NVIDIA's revenue for this fiscal year to reach $403.5 billion. From the current fiscal year to the $1 trillion target, whether NVIDIA can turn supply constraints into room for growth will be a key variable in determining whether this expectation can be realized.
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