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Key Summary
NVIDIA reported revenues of $96.2 billion for the second quarter of fiscal year 2027 (ended August 26, 2026), significantly beating market expectations.
The growth was driven by the full-scale production of its next-generation architecture, 'Vera Rubin,' alongside robust demand for infrastructure building from newly established AI labs.
However, concerns have emerged that rising High Bandwidth Memory (HBM) prices and transition costs for next-generation products could adjust its Q4 gross margin down to the 71% range.
As the US 10-Year Treasury Yield (US10Y) hovers comfortably around the 4.7% mark, the market's focus has once again turned to whether Nasdaq can sustain its high valuation multiples.
Current Market Summary
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As of August 30, 2026, the tech-heavy Nasdaq index is taking a breather, consolidating around the 26402.42 level.
Following the recent Jackson Hole meeting (August 27-29), Fed Governor Kevin Warsh's somewhat hawkish policy tone and the US 10-year Treasury yield reaching 4.73% have acted as a heavy cost pressure on tech stocks.
At the same time, NVIDIA's earnings surprise is serving as a strong defensive line preventing a sharp contraction in Nasdaq's multiples.
According to Daily Stock's proprietary Fear & Greed Index, the Nasdaq Fear & Greed Index currently stands at 54.4, indicating a "neutral" level.
This is almost unchanged from 54.5 (neutral) a week ago, indicating that investment sentiment has stabilized compared to 37.9 (fear) a month ago.
On the other hand, the KOSPI index closed at 6788.88 and the KOSDAQ index at 838.41, showing that the domestic market is still facing greater downward pressure compared to the US market.
The USD/KRW exchange rate closed at 1,380.50 KRW, maintaining high foreign exchange volatility.
The KOSPI Fear & Greed Index currently stands at 46.6 (neutral), indicating a stronger wait-and-see attitude among investors compared to 49.6 (neutral) a week ago or 56.6 (neutral) three months ago.
Financial Analysis
NVIDIA's total revenue for this quarter reached $96.221 billion, representing a massive 106% surge year-over-year.
In particular, the data center division recorded revenues of $89 billion, solidifying its dominant position in the industry.
| Item | Fiscal Q2 2027 (Actual) | Year-Over-Year (FY2026 2Q) | Quarter-on-Quarter (QoQ) | Year-on-Year (YoY) |
|---|---|---|---|---|
| **Total Revenue** | $96,221M | $46,743M | +18% | +106% |
| **Data Center Revenue** | $89,000M | $41,000M | - | +117% |
| **Gross Margin (GAAP)** | 75.0% | 72.4% | +0.1%p | +2.6%p |
| **Operating Income** | $63,734M | $28,440M | +19% | +124% |
| **Net Income** | $59,688M | $26,422M | +2% | +126% |
| **Non-GAAP EPS** | $2.22 | $1.05 | - | +111.4% |
Its key profitability metric, GAAP Gross Margin, defended a level of 75.0%, proving strong underlying profit power.
The operating margin also remained at 66.2%, a level rarely seen elsewhere in the big tech ecosystem.
However, Chief Financial Officer Colette Kress mentioned that supply chain bottlenecks and HBM memory price pressures could drag gross margins down starting next quarter.
Specifically, the possibility of the Q4 margin being adjusted to around 71% was raised, bringing profitability peak-out concerns back to the surface.
Valuation
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NVIDIA is displaying a rare phenomenon where its valuation multiples are actually compressing despite its soaring stock price, thanks to phenomenal earnings per share (EPS) growth.
Currently, NVIDIA's Forward PER stands at approximately 18.4x, which appears numerically cheaper compared to its competitors AMD (43x) or Broadcom (23x).
However, it is hard to conclude that the stock is simply undervalued because of the market's doubts regarding the "durability of earnings."
While the capital expenditure (CapEx) scale of major cloud hyperscalers is expected to eventually reach the $1 trillion range, worries persist that actual AI monetization models will not be able to keep pace with this investment speed.
To defend the average multiple of the Nasdaq 100 Index, hardware profits led by NVIDIA must maintain high margin rates.
In an environment where interest rates (US10Y) have settled in the 4.7% range, even a minor signal of profit damage could trigger a sensitive reaction in Nasdaq's valuation.
Expert & Institutional Analysis
Global investment banks are expressing optimism regarding the short-term guidance upgrade and the historic $26 billion shareholder return program executed this quarter.
In particular, the remaining $99 billion unused share buyback authorization is viewed as a key buffer that will support the stock price on the downside.
Macroeconomic analysts, including those at Societe Generale (SocGen), suggest that real cash-flow engines like NVIDIA can serve as solid alternatives in an environment where the equity risk premium relative to bonds is narrowing.
The guidance for an additional 70% revenue growth in FY2028 announced by the CFO is evaluated to provide sufficient revenue visibility, even when factoring in supply constraints.
On the other hand, some portfolio managers argue that the capital cost burden on big tech firms could eat away at NVIDIA's profits over the long term.
NVIDIA's revenue surge translates directly into accumulated depreciation expenses and capital expenditure burdens for cloud firms. If big tech's margins are damaged, demand for NVIDIA's next-generation chips will inevitably slow down.
Risk Factors
The most direct short-term risk is the margin pressure arising from high-performance memory supply chain bottlenecks and rising unit costs.
The supply shortage of next-generation high-bandwidth memory required for the mass production of the Vera Rubin architecture is expected to persist for the time being.
At the same time, the Federal Reserve's long-term high-interest rate stance is a macroeconomic factor that compresses the multiples of growth stocks in general.
If Fed Governor Kevin Warsh's hawkish stance hardens and bond yields (US10Y) spike once more, valuation discounts for tech stocks will be inevitable.
Finally, global regulatory risks and geopolitical instability cannot be ruled out.
Although NVIDIA maintained strong performance despite restrictions on exporting data center products to China, it would be difficult to avoid supply chain shocks if trade conflicts expand to other countries.
Investment Perspective Summary
NVIDIA's latest earnings release once again strongly demonstrated that the AI transition is not just a bubble built on groundless hype.
However, the margin pressure from next-generation chip production and the high-for-longer interest rate environment demand a somewhat conservative approach from investors.
At this point, rather than reacting excessively to short-term surprises, the Nasdaq is in a phase of re-evaluation, weighing the sustainability of earnings against the macroeconomic financial environment.
Therefore, rather than getting caught up in temporary post-earnings volatility, it would be more reasonable to adopt a strategy of managing portfolio volatility while monitoring the continuity of capital expenditures by hyperscalers.
Q&A with Daily Stock
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Q1. What was the key driver of growth in NVIDIA's earnings this quarter?
A1. It was the stellar performance of the Data Center division, which surged 117% year-over-year. The infrastructure-building boom among newly established AI startups and the explosive infrastructure expansion of hyperscalers completely drove the earnings.
Q2. What is the background of the margin decline in Q4 projected by management?
A2. The cause is component supply imbalances and surging HBM prices during the early stages of mass-producing the next-generation Vera Rubin architecture. The CFO warned that these cost burdens could temporarily lower the gross margin to the 71% level.
Q3. Why is the stock price not skyrocketing despite a seemingly cheap Forward PER of 18.4x?
A3. It is because the market is not just looking at the "valuation relative to current earnings," but is questioning the "sustainability of these massive profits." Investors are waiting to see if the astronomical expenditures by big tech companies will translate into actual corporate business growth.
Q4. Specifically, what kind of blow does the rise in the US 10-Year Treasury Yield (US10Y) deal to the Nasdaq?
A4. When risk-free interest rates rise, the discount rate applied to the future value of growth stocks—which are risk assets—increases. Consequently, multiple compression occurs, capping the upside potential of technology stocks.
Q5. What macro indicators should investors watch most closely when entering the market?
A5. The trend of Treasury yields, which are tied to the US Fed's policy signals (interest rate path). In addition, whether major big tech companies maintain or upgrade their capital expenditure (CapEx) plans for the coming quarters—which ultimately decides NVIDIA's revenue guidance—is crucial.