Dorothy

And we're talking about $50 billion data centers," Huang said. "And so, that tells you something about the productivity of Nvidia's technology and the rentability of it." Cramer alluded those remarks from Huang, and argued the debate should be settled. "When you get a situation where you know that you can buy a product and make money with it, I think the whole thing about when is it going to be profitable is answered," Cramer said. Amazon offered fresh evidence of the demand. Also on Wednesday, Nvidia announced an expansion of its partnership with Amazon's cloud unit. Under the deal, Amazon Web Services will buy 2 million additional Nvidia GPUs in 2027 and 2028, as well as install Vera central processing units (CPUs). Amazon also plans to use Nvidia technology for robotics.

Kress, in her CFO commentary, said supply and capacity commitments surged from $119 billion to $279 billion, driven by rising memory costs, a persistent boogeyman that has been behind rising prices all around the tech sector. During the call, Kress clarified further that the magnitude of memory prices led Nvidia to reset expectations, given the higher prices expected next year, said Kress.

Another concern, and a reason why the stock is dumping: Nvidia’s future supply commitments have more than doubled in a single quarter,  jumping to $279 billion from $119 billion. The reason, as Bloomberg notes, is striking: Nvidia says the increase is primarily related to securing memory. These aren’t costs already incurred, but commitments to suppliers to lock in the components and capacity needed to meet AI demand over the next several years. Nvidia has $92 billion committed for the rest of this fiscal year, $87 billion for FY28 and $88 billion for FY29

Nvidia expects revenue to grow by about 70% in fiscal 2028. VCG via Getty Images

Shares were last up 5.95% in premarket trading. Nvidia CFO Colette Kress said on Wednesday that the company expects revenue growth of 70% for fiscal 2028, which runs from February 2027 to January 2028. CEO Jensen Huang said demand "is much greater than 70%," but the company is constrained on the amount of product it can supply.

Nvidia’s surprising stab at providing longer-term guidance (70% revenue growth for fiscal 2028, versus consensus around 45%) was taken positively, especially in the context of the number reflecting constrained supply dynamics (imagine how high the forecast could have been without the bottlenecks). The conference call pushed back on the circular deal narrative, while Huang later said “investing in these companies is a once in a generation opportunity. I think the only regret that I have is that I didn’t invest more and sooner.”

TSMC, Nvidia's main manufacturer, continues to face supply constraints, while memory chips — a key component of Nvidia's systems — also remain in short supply.

On Thursday, analysts also pointed to a "threat" to Nvidia's near monopoly over the most advanced AI chips by recently announced custom semiconductors built by hyperscalers and AI labs like OpenAI.

Nvidia had already reported results that sailed past estimates by the time CFO Colette Kress came into the earnings call with a stunning forecast for next year.

“Even though our demand is much greater than 70%, our supply allows us to confidently deliver 70%,” Huang said in response to an analyst question.

With around 40% of the US stock market concentrated in ten companies heavily invested in AI, Nvidia's fortunes matter far beyond Silicon Valley.

‘We see it differently’ While the booming demand for AI chips has made Nvidia the world’s most valuable company, with a market cap of more than $5 trillion, critics have warned about the company’s spate of investments in other companies within the AI industry, from data center operators to frontier model makers like Anthropic. Many view the deals, which Nvidia is financing from its massive cash pile, as creating dangerous interdependencies with the AI business.

Still, Nvidia’s involvement has been critical and substantial and, moreover, has led to a drag on the stock price. The company disclosed maximum gross guarantee exposure of $108.5 billion, which mostly stems from credit support for SB Energy’s Ohio tech campus, which will host Nvidia compute leased to OpenAI. The rest is due to $3.5 billion backing lease obligations for AI cloud partners. Nvidia has also publicized investments of nearly $50 billion in frontier AI labs and has partnered with private equity giants Apollo, BlackRock, Blackstone, Goldman Sachs, and KKR to raise more than $500 billion in third-party capital for AI infrastructure.

Nvidia's growing financial strength has also reshaped its role in the sector. It has become a backer to those that rely on its chips, providing some funding to the likes of OpenAI, Anthropic, and SpaceX to help continue the costly buildout of AI infrastructure.

Its China business has been highly uncertain. In May, Washington cleared roughly 10 Chinese firms, including Alibaba, Tencent and ByteDance, to buy one of Nvidia’s most powerful AI chips, the H200, though deliveries stalled for months.

Nvidia forecast third-quarter revenue of $108 billion, plus or minus 2%, compared with analysts' average estimate of $104.19 billion, according to data compiled by LSEG. REUTERS