NVIDIA ignites a new Wall Street expectation: $1 trillion revenue sprint for FY2028?

Nvidia once again shook the market with its better-than-expected performance and released a forward-looking outlook that forced Wall Street to reprice the company.

In its latest earnings call, the company indicated that revenue for the fiscal year ending in January 2028 could increase by more than 70%, far exceeding the prior FactSet consensus expectation of around 45%. TD Cowen analyst Joshua Buchalter called this guidance a "significant potential catalyst for the share price," directly driving Nvidia's stock up 8.7% on Thursday—the largest single-day gain since May 2024. At the close of trading, Nvidia’s market cap reached $5.49 trillion, with a single-day value increase of $441.5 billion, marking the company's second largest single-day market cap boost in history.

Even more striking, some analysts are looking further ahead. Raymond James analyst Simon Leopold wrote in a research note that it "seems possible" for Nvidia to reach $1 trillion in revenue in the fiscal year ending January 2029, while FactSet’s consensus as of Wednesday put that year’s revenue at less than $750 billion.

70% Growth Guidance: Conservative Forecasting Under Supply Constraints

Nvidia’s management made it clear during the earnings call that the 70% growth forecast already factors in supply tightness; without those bottlenecks, the actual number would be higher. JP Morgan also pointed out that despite the guidance being far above expectations, it is likely still conservative. The company explicitly described the current phase as being in a "supply-constrained" state, and if supply were unconstrained, actual demand would be significantly higher.

Goldman Sachs analyst James Schneider believes that if Nvidia continues to partner with tech companies to build data centers and further narrow the gap between customer demand and supply, the company could outperform its guidance for the 2028 fiscal year.

On gross margin, Nvidia expects some compression for the remainder of the current fiscal year, but forecasts that next fiscal year margins will remain stable in the 72% to 73% range. Simon Leopold sees this as below recent highs but sufficient to alleviate market pessimism; he notes that, considering higher memory chip prices and intensifying competition from custom chips, this guidance range is "better than the worst-case scenario."

Rubin Platform and Ecosystem Moat: Multiple Growth Engines Take Shape

Buchalter interprets the guidance as a "strong signal of confidence in their business visibility," set against the backdrop of the new-generation chip platform Vera Rubin starting mass production and shipments. Vera Rubin is Nvidia’s next-generation AI chip platform following Blackwell.

Bernstein analyst Stacy Rasgon says Nvidia's July quarter results "should remind investors why they own this stock." In his note, he highlighted that demand is accelerating, coinciding with the Rubin platform being Nvidia’s “largest upcoming product cycle in history.”

Rasgon also emphasized that Nvidia's balance sheet is becoming "as important a moat as its technology." The company not only locks in customers for products worth hundreds of billions of dollars through equity investments and revenue-sharing agreements, but can also "support and expand the ecosystem surrounding its products."

Simon Leopold believes that, in terms of revenue, Vera Rubin chips are expected to contribute around 20% of data center revenue in the third fiscal quarter. During the same period, Groq 3 LPX reached full production, with large-scale shipments beginning later this quarter, and new cloud service provider Nebius being an early adopter. The scaling-up pace of Rubin and LPU production both exceeded previous model forecasts, and related estimates have been raised accordingly.

Simon Leopold further noted that Nvidia's progress in its CPU business also exceeded expectations. The Grace CPU’s rolling 12-month revenue has surpassed $5 billion, and the next-generation Vera CPU is already in full production. Based on orders, Nvidia's CPU business has reached an annualized revenue scale of $20 billion, and as supply continues to improve, CPU revenue is expected to more than double in the fiscal year 2028.

Wall Street Remains Divided, But Bulls Accumulate More Chips

Despite Nvidia's strong results boosting bullish confidence, there is still no full market consensus. Buchalter admits that Nvidia’s strategy of providing financing support for its ecosystem partners is "unlikely to convince the bears," but he himself holds a "constructive" view on the sustainability of diversified AI infrastructure spending and Nvidia’s status as the "core enabler."

Overall, Buchalter says bulls have "gained more net points" from these results and bluntly states Nvidia’s stock is "significantly undervalued." Goldman’s Schneider adds that this outlook "may ease investor concerns about high capital expenditure costs."

Analysts expect Nvidia’s revenue to reach $403.5 billion this fiscal year. From this year’s figure to the $1 trillion target, whether Nvidia can turn supply constraints into growth opportunities will be the key variable determining if this expectation can be met.