Nvidia just gave the AI trade another major growth reset

By AltIndex Research · 10 min read · August 27, 5:33 am

It seems like that every few days, investors ask whether the AI boom is starting to slow. Nvidia just gave them another reason to push that question further into the future.

Nvidia (NVDA) reported $96.2 billion in second-quarter revenue, up 106% from a year ago, as Data Center revenue surged 117% to $89 billion. The company then guided for roughly $108 billion in revenue next quarter — even while assuming no Data Center compute revenue from China.

But the biggest number may have come from further out. Nvidia expects revenue to grow roughly 70% in the fiscal year ending January 2028, signaling that management sees the AI infrastructure buildout continuing at extraordinary speed well beyond the current quarter.

The stock responded accordingly, jumping roughly 8% following the report.

For investors, the results provide another reminder that Nvidia is no longer simply benefiting from the AI boom. Its financial results have become one of the clearest measurements of how quickly that boom is still expanding.

The AI boom just got another growth reset

Nvidia's quarter was remarkable even by Nvidia standards.

Revenue of $96.2 billion increased 18% sequentially and 106% year over year. Data Center revenue reached $89 billion, up 117% from the same period last year.

GAAP net income climbed to $59.7 billion, while gross margin remained an extraordinary 75%.

The next quarter may be even bigger.

Nvidia expects approximately $108 billion in Q3 revenue, plus or minus 2%. Notably, that forecast assumes no Data Center compute revenue from China, where export restrictions continue to limit Nvidia's opportunity.

Meanwhile, its next-generation Vera Rubin platform is already moving into full production, with systems running at customers including CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud and Nebius.

That matters because one of the biggest questions hanging over AI stocks has been whether hyperscaler spending is approaching a peak. Nvidia's results suggest the opposite: more customers are building AI infrastructure, new chip generations are entering production, and demand is still growing fast enough for Nvidia to forecast another enormous step higher.

The growth was showing up outside the earnings report

The financial results arrived this week. Some of the underlying growth signals have been building for much longer.

At AltIndex, we track more than 25 alternative data signals on Nvidia, including hiring, employee growth, business outlook, web traffic and social audience.

Several of those signals continue to point in the same direction as Nvidia's earnings.

The hiring numbers are particularly notable.

Nvidia currently has roughly 4,400 open LinkedIn job postings, more than double the level a year ago. Its estimated LinkedIn workforce has grown to more than 50,000 employees, up approximately 23% over the past year and more than 50% over the past two years.

That is significant for a company already operating at Nvidia's scale. Rapid hiring does not guarantee future revenue growth, but it does show that Nvidia is still expanding aggressively rather than behaving like a company preparing for an AI slowdown.

The internal sentiment data tells a similar story. Roughly 95% of employees currently report a positive business outlook, according to the employee-review data tracked by AltIndex.

Meanwhile, estimated web traffic is up about 24% year over year, Nvidia's Instagram audience has increased roughly 24%, and its X following is up around 11%.

No single one of these signals predicts an earnings beat. Together, however, they paint a picture of a company whose employment, internal confidence, online reach and customer demand were continuing to expand before Nvidia reported another record quarter.

AltIndex's AI Score was already flashing Buy on Nvidia five years ago

That strength has also been reflected in AltIndex's broader AI Score for years.

Our available five-year history begins in October 2021. At the start of that history, Nvidia had an AI Score of 79 — comfortably above our Buy threshold of 60.

Nvidia's split-adjusted share price at the time was approximately $20.68.

Today, the stock trades around $227.

That represents a gain of roughly 1,100%.

A hypothetical $10,000 investment in Nvidia at the beginning of our available five-year AI Score history would therefore be worth approximately $110,000 today, before taxes, fees and other costs.

The AI Score has moved over that period, as the underlying signals and Nvidia's valuation have changed. But that is not really the important part of the story.

The bigger point is that Nvidia was already showing unusually strong alternative-data, fundamental and market signals years before it became the defining company of the generative-AI investment boom.

Monthly averages based on AltIndex historical data. Share prices are split-adjusted.

The current signal is still bullish

Nvidia's current AltIndex AI Score is 78, keeping the stock in Buy territory.

The employment component has strengthened to 81, while our audience score is 75 and customer-growth score is 75.

That broadly matches what Nvidia just told investors in its earnings report: demand remains unusually strong, the company is still expanding to meet it, and the next generation of AI infrastructure is already being deployed.

There is an important difference, however, between recognizing a strong business and assuming a stock can only go higher.

Nvidia is now worth more than $5 trillion. Expectations are enormous, and investors are already pricing in years of rapid AI infrastructure expansion.

That means future returns will depend not only on whether Nvidia keeps growing, but whether it can continue growing faster than an increasingly demanding market expects.

What investors should watch next

The biggest risk to Nvidia's growth story may no longer be a lack of demand.

It may be the industry's ability to physically supply enough infrastructure.

Nvidia has already pointed to memory availability as an important constraint. The Vera Rubin rollout requires enormous quantities of advanced memory, networking hardware, power and data-center capacity.

That makes companies across the AI supply chain — from Micron and TSMC to CoreWeave and Nebius — increasingly important to Nvidia's ability to keep delivering against demand.

Investors should also keep watching hyperscaler capital spending. Nvidia can only maintain its current trajectory if Microsoft, Amazon, Meta, Google, AI labs and other customers continue spending at extraordinary levels.

So far, Nvidia's latest quarter provides little evidence that they are backing away.

The bottom line

For years, investors have repeatedly asked when Nvidia's AI growth would finally slow.

The latest earnings report did not answer that question.

Instead, it pushed the expected slowdown further into the future.

Revenue more than doubled. Data Center sales grew even faster. Nvidia expects another record quarter, Vera Rubin is already entering production, and management is forecasting another massive year of growth beyond that.

AltIndex's alternative data supports the same underlying picture. Nvidia is hiring aggressively, headcount continues to climb, employee business outlook remains exceptionally strong, and the company's web and social audiences are still expanding.

And this is not a new signal.

When our available five-year AI Score history begins in October 2021, Nvidia was already flashing a Buy signal at a split-adjusted price of just $20.68. The stock has since risen roughly 1,100%.

That past performance does not guarantee another 1,100% return — especially from a company now worth more than $5 trillion. But Nvidia's latest results make one thing increasingly difficult to argue: the underlying AI growth story is not showing many signs of running out of momentum yet.

See Nvidia's latest AI Score, alternative data and stock analysis on AltIndex →