Nvidia forecasts 70% sales growth next year, signals AI spending boom has years left to run

Nvidia has forecast a 70% rise in revenue for its next fiscal year ending January 2028, according to Business Recorder, a projection the chip company rarely makes. Shares of the company climbed nearly 5% in extended trading after an initial dip of more than 1%. Chief Executive Jensen Huang said compute is now generating revenue as AI tools prove productive and profitable.

Analysts had expected 44% revenue growth over the same period, and the company said demand is broadening beyond its earliest large cloud customers. In the fiscal second quarter ended July, the data center segment posted $89 billion, a gain of more than 100%, ahead of an $85.08 billion estimate. Nvidia also expects demand from AI labs to make up roughly a quarter of its business next year, and it widened its partnership with Amazon Web Services to deploy 2 million more graphics processors in 2027 and 2028.

Chief financial officer Colette Kress said higher memory prices and component costs will keep pressuring margins, which are expected to bottom at roughly 71% to 72% in the fourth quarter, compared with about 74% in the third quarter. For the third quarter, the company forecast revenue of $108 billion, plus or minus 2%. China remains highly uncertain, and the outlook does not include China data center revenue.