Nvidia expects strong profits due to data centre demand

Nvidia publishes its results for the second quarter of fiscal 2027 on Wednesday 26 August. Analyst Stacy Rasgon of Bernstein expects the chip company to present “very, very good” results, as the so-called Rubin cycle begins. According to Rasgon, more than $500 billion in data centre revenue is gradually becoming realistic next year.

In brief:

• Nvidia publishes its Q2 results after market close on Wednesday
• Analyst expects very good results thanks to the Rubin cycle
• Possibly more than $500 billion in data centre revenue next year

What Rasgon is watching

Rasgon is focusing on three signals that are crucial for the future share price trajectory. First, he is tracking whether Nvidia provides a higher growth outlook for the coming periods. This would indicate that demand for chips for artificial intelligence and data centres is increasing further.

Second, he is watching the gross margin. Rasgon expects Nvidia to maintain it in the mid-70s, despite rising costs for memory components and wafers. This would demonstrate that the company retains pricing power despite rising production costs.

Clarity on financial support

Third, Rasgon is looking for clarity on Nvidia’s financial backstops for data centre projects worth hundreds of billions of dollars. This aspect is becoming increasingly relevant as major cloud providers invest heavily in AI infrastructure.

The results, which will be released after market close on Wednesday, are likely to be decisive for investor confidence in the company’s follow-up strategy.