Nvidia (NVDA.US) stages a "Back to the Future" comeback: 70% growth guidance shocks Wall Street, analysts rush to upgrade, bullish sentiment in options market surges

According to Zhitong Finance APP, against the backdrop of continuously exploding demand for artificial intelligence (AI) computing power, Nvidia (NVDA.US) has once again demonstrated its unshakable dominance in the AI chip sector with its latest quarterly results, far exceeding market expectations. Even more shocking to Wall Street is the company’s guidance for fiscal year 2028, which is nearly $200 billion higher than the market consensus, directly propelling its pre-market stock price up by almost 7% and prompting many analysts to raise their target prices.

Data shows that for the quarter ended July 2026 (the company’s fiscal second quarter), Nvidia generated revenue of $96.2 billion, up 106% year-over-year, far above Wall Street’s expected $92 billion. Net profit reached $59.69 billion, with earnings per share of $2.46, compared to a net profit of $26.42 billion and earnings per share of $1.08 in the same period last year, representing a year-over-year increase of over 125%. Gross margin remained at a high level of 75%, though slightly below previous market expectations.

In terms of business structure, the data center business continued to be the pillar, with single-quarter revenue reaching $89 billion, a 117% year-over-year increase. The company stated that demand for the Blackwell Ultra platform remained robust, with significant increases in revenue from sovereign AI, AI-native enterprises, and enterprise clients. In addition, edge computing business revenue was $7.2 billion, up 13% quarter-over-quarter and 27% year-over-year. Operating expenses rose by 55% year-over-year to $8.41 billion, reflecting continued high investment in R&D and market expansion.

Nvidia founder and CEO Jensen Huang stated in the financial report: “AI has reached a tipping point; it is doing useful work, tokens are becoming productive and profitable. Now, compute itself is revenue.” He further emphasized that expansion of AI infrastructure is “running at full speed,” with the next-generation Vera Rubin platform fully in production and achieving the fastest ramp-up speed in company history.

For the current quarter (August to October), Nvidia issued a revenue guidance of around $108 billion, higher than analysts’ expectations of $103.9 billion and up about 89% year-over-year. The company also expects a gross margin of roughly 74% for the quarter, slightly below Wall Street’s expectation of 75%, mainly impacted by product mix and early ramp-up costs.

What really ignited the market was the company’s full-year outlook for fiscal 2028. Nvidia CFO Colette Kress stated on the conference call that the company expects fiscal 2028 revenue to grow by 70% year-over-year, while the prior Wall Street consensus was only 44%. More critically, Kress emphasized that this 70% growth level is still constrained by supply, with actual demand growth exceeding triple digits. Using fiscal 2027 revenue of about $396 billion as a base, fiscal 2028 revenue would reach approximately $673 billion, surpassing Apple (AAPL.US) and Alphabet (GOOGL.US), and second only to Amazon (AMZN.US), making Nvidia the world’s second highest-revenue technology company.

New Guidance Shocks Wall Street, Nvidia Pulls off a “Back to the Future”-Style Comeback

Jefferies analyst Blayne Curtis directly quoted a classic Star Wars title in his report, even calling this guidance “The Emperor Strikes Back” to describe Nvidia’s astonishing guidance.

He pointed out: “The key takeaway from this earnings report is the 70% fiscal 2028 full-year revenue growth guidance, while Wall Street expected only 44%, corresponding to $700 billion revenue compared to consensus of just $570 billion, and $200 billion above the prior $1 trillion Blackwell plus Rubin framework. The 70% growth is just the baseline, with unconstrained demand near 100%. Based on this, we now clearly see a path to $1 trillion revenue in fiscal 2029, an amazing number for a company of this size.” Curtis maintains a “Buy” rating on Nvidia, with a target price of $300.

Other institutions were equally effusive in their praise, with Evercore ISI being among them.

Evercore ISI analyst Mark Lipacis sharply raised the target price from $413 to $465, maintaining an “Outperform” rating. He believes the upward revenue outlook is enough to offset the lowered gross margin guidance (72%-73% for calendar 2027, compared to previously the mid-70% range) and the impact from $160 billion in multi-year guarantees and commitments made to help customers secure land, power, and shell capacity.

Lipacis wrote: “We believe Nvidia has two catalysts: first, entering a positive capital return cycle; second, possibly stabilizing or even increasing market share in 2027. On our 13x P/E estimate for 2027 calendar year EPS, Nvidia is one of the most attractive risk-reward names in our coverage.”

Bank of America analyst Vivek Arya also reaffirmed Nvidia as his top pick and maintained a “Buy” rating, believing management has demonstrated a “compelling vision”—including guidance, off-balance sheet disclosures, supply, and temporary gross margin decline—all of which should quiet skeptics for some time. “Management clearly showed how strategic investment helps Nvidia consolidate its dominance during this ‘once in a generation’ AI infrastructure wave; this vision is persuasive,” Arya wrote in his report.

J.P. Morgan raised its target price from $280 to $320, maintaining an “Overweight” rating. The firm noted data center growth is accelerating, Blackwell Ultra demand is strong, and Vera Rubin platform shipments have already begun, with orders from key hyperscale cloud providers, AI cloud vendors, and system OEMs. The company claims this is the fastest product ramp in its history. J.P. Morgan expects gross margin to bottom out in the fourth quarter of fiscal 2027 and rebound in fiscal 2028. The 2028 gross margin outlook is already supported by HBM supply commitments—Nvidia has secured HBM supply with known prices for the majority of its demand.

Mizuho raised its target price from $300 to $315, maintaining an “Outperform” rating. The firm expects fiscal 2028 revenue to reach roughly $700 billion, up over 70% year-over-year and far above the current consensus of $574 billion. It also expects Blackwell Ultra ramp to continue, with Vera Rubin possibly contributing about 20% of revenue in the October quarter. On the gross margin side, it's expected to drop to about 74% in the October quarter, down 100 basis points sequentially, hit a low of 71%-72% in the January quarter, and then stabilize at 72%-73% for fiscal 2028. The $315 target price is based on roughly 20x fiscal 2028 earnings.

Goldman Sachs raised its target price from $285 to $300 but maintained a “Neutral” rating. Analyst James Schneider believes that under a strong outlook for calendar 2027, the stock price should retain its recent gains, but amid surprise guidance and already high market expectations, the stock may move in a range. He noted that management’s pledge to return over 50% of excess cash flow to shareholders may provide additional support to the stock. Furthermore, the mid-term gross margin guidance of 72%-73% for calendar 2027 could ease investor concerns about rising input costs, while more transparent disclosure of customer financial guarantees and commitments should help investors better assess potential financial risks.

Options Market: One-Month Target Points to $260

The options market was also abuzz after the earnings announcement. According to options trading data, the implied volatility priced before Nvidia’s results was around ±6.1%, and the 7% pre-market gain on Thursday fell almost precisely within this forecast range.

With the earnings trading dust settled, the market’s attention quickly shifted to the options chain expiring September 25. The implied volatility of this chain shows the market expects Nvidia’s price to move by about ±10.1% in a month, corresponding to a price range of roughly $202 to $247 (based on pre-market prices).

However, what’s truly noteworthy is the distribution of call option open interest. The $260 strike call option open interest stands at 31,842 contracts, the largest single position in the entire options chain, representing about a 15.7% premium over the pre-market price on Thursday. This means a considerable number of traders had already set their sights on the $260 level before the earnings announcement. The $250 call open interest is 28,914 contracts, $240 has 25,731 contracts, and $230 holds 22,619 contracts, showing a stepwise bullish structure from low to high, extending all the way to $300 calls (15,847 open interest)—a 33% premium to the pre-market price. Since the $260 strike call option is far beyond the volatility range implied by the September 25 options chain, holders of these contracts are clearly betting on momentum continuation rather than a slow drift following earnings.

On the downside, the $200 strike put option is the largest bearish contract, with open interest of 24,107, about 11% below pre-market prices; this level is seen as a key line of defense where the “post-earnings bullish logic begins to break down.” Further down, put options with strikes at $195, $190, $185, and $180 form a protective ladder, while the $170 strike put’s 18,847 open interest is being used by traders as a hedge against extreme tail risk.

The Sole Bearish Voice: Seaport Says “Sold Out” Caps Upside

Amidst the bullish chorus, Seaport Research Partners analyst Jay Goldberg is the only Wall Street analyst maintaining a “Sell” rating. In an interview after Nvidia’s earnings release, he said that while the chip giant’s quarterly performance was “incredibly impressive,” “no one will care” because the company’s chips are already sold out and supply constraints mean there’s little room for upside surprises this year.

Goldberg pointed out that Nvidia’s reliance on TSMC (TSM.US) is a short-term constraint that’s hard to overcome. He believes Nvidia’s chip production capacity allocations have been entirely locked in for this year. “When your product is sold out, where does your upside come from? This situation will not change this year.” He specifically noted that Nvidia’s dependence on TSMC is a structural constraint that cannot be eased in the short term.

He also mentioned that Nvidia’s acquisition of Groq could increase output outside TSMC next year, and that software and new cloud business revenue could provide additional growth, but all this will take time.

Additionally, he highlighted competitive threats from AMD (AMD.US) Instinct chips, Google TPU, and in-house chip development by OpenAI and Anthropic. Nevertheless, he expects Nvidia to retain the largest market share.