Nvidia reports Q2 earnings as rising memory costs and AI demand collide

Nvidia is set to release its fiscal second-quarter 2027 results on August 26 after the bell, and the numbers Wall Street expects are frankly absurd by any historical standard. Analysts are looking for roughly $92B in revenue and an adjusted EPS of $2.09, which would represent approximately 97% year-over-year growth. The company itself guided for about $91B in revenue, give or take 2%, with non-GAAP gross margins hovering near 75%.

Those figures exclude data-center compute revenue from China, which is worth keeping in mind when calibrating the scale of what Nvidia is actually moving.

The memory problem nobody can ignore

The elephant in the earnings call will be memory prices. Server DRAM contract prices surged 53-58% quarter-over-quarter in Q2 2026, according to TrendForce. High-bandwidth memory and DRAM costs from suppliers like SK Hynix, Samsung, and Micron have climbed steeply enough that Nvidia has already told customers to expect AI server prices to increase by more than 15% on configurations shipping in early 2027.

That’s a meaningful bump for systems built around Grace Blackwell and the forthcoming Vera Rubin architectures.

For context, Nvidia’s data center GPUs don’t just need any memory. They require HBM, which is manufactured by a small number of suppliers with limited capacity. When those suppliers raise prices, Nvidia doesn’t have many places to turn.

A backlog that tells its own story

Nvidia CEO Jensen Huang has described the company’s demand trajectory as “parabolic.” Nvidia is sitting on $119B in supply commitment backlog, and the company has reaffirmed a target of $1 trillion in cumulative revenue from the Blackwell and Vera Rubin platforms by the end of calendar 2027.

Last quarter, Q1 FY2027, Nvidia posted record revenue of $81.6B, an 85% year-over-year increase. The Data Center segment alone hit $75.2B, growing 92% year-over-year. Data Center revenue now accounts for more than 90% of Nvidia’s total business.

What the earnings call needs to address

If HBM and DRAM prices continue climbing at the pace seen in recent quarters, Nvidia’s 75% gross margin target could come under genuine pressure by late 2027. The company’s ability to maintain pricing power with hyperscaler customers, who are themselves facing scrutiny over the return on their AI infrastructure investments, will be a defining theme for the next several quarters.

For the broader AI ecosystem, Nvidia’s earnings serve as a barometer. A beat on revenue with stable margins would signal that the AI buildout remains firmly in expansion mode. Any margin compression or softer-than-expected guidance could ripple through every company in the AI supply chain, from memory makers to server assemblers to the cloud providers buying the finished product.

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