Nvidia Earnings: Rubin Growth Faces Margin Pressure

Nvidia earnings showed revenue of $96.2 billion in fiscal Q2 2027, up 106% year on year. Data-centre revenue rose 117% to $89.0 billion, while non-GAAP diluted earnings per share reached $2.22 and exceeded market expectations. Nvidia guided for fiscal Q3 revenue of about $108 billion, plus or minus 2%, excluding data-centre computing revenue from China. The Nvidia earnings report shifted investor focus from another revenue beat to the company’s next growth phase. Vera Rubin has entered full production, with CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius operating Rubin systems. Traders will watch whether Rubin extends the Blackwell-led AI infrastructure cycle and supports further hyperscaler and AI laboratory capital spending. Gross margins are the main risk. Non-GAAP gross margin was 75% in Q2 but is expected to fall to about 74% in Q3 and 71%-72% in Q4. Higher costs for high-bandwidth memory, networking, advanced packaging, optical interconnects, power and cooling are adding pressure. Nvidia has raised AI server prices by more than 15%, but pricing has not fully offset cost inflation. Supply commitments more than doubled to $279 billion, partly because of memory purchases for Rubin. For traders, key indicators include Rubin deployment, AI infrastructure demand, hyperscaler capital expenditure, margin trends and China export access. The results also have read-through implications for semiconductor, memory, networking, optical communications and data-centre infrastructure stocks. Nvidia earnings remain a major signal for the wider technology sector and could indirectly influence risk appetite in crypto markets.