Nvidia’s $96 Billion Reignites AI Trade.

Mazen Al Sabbagh

— 4 min read
Share

Nvidia reported fiscal Q2 revenue of $96.2 billion, a 106% increase year-over-year and 18% sequentially, following Wednesday's market close. Data-center revenue, driven by the Blackwell Ultra ramp, reached $89.0 billion, up 117% from the prior year and surpassing the ~$85.9 billion analyst consensus. This segment comprised $48.7 billion from hyperscale operations and $40.3 billion from AI clouds, industrial applications, and enterprise, marking a 25% sequential growth.

TL;DR

Lead Story: Nvidia’s $96 Billion Quarter Reignites AI Trade

The primary market mover was Nvidia's forward guidance, projecting $108 billion for the current quarter, approximately $4 billion above consensus estimates. CEO Jensen Huang further articulated a projected 70% revenue growth for fiscal 2028, citing $1 trillion in Blackwell and Vera Rubin visibility through 2027. This figure directly addressed persistent market inquiries regarding the sustainability of current growth trajectories.

Following an initial dip in Wednesday's after-hours trading due to high expectations, shares advanced approximately 8% on Thursday, marking the largest single-session gain since April 2025 and adding an estimated $442 billion to its market capitalization. This momentum propelled the Nasdaq Composite up 1.57% to 26,541, while the S&P 500 gained 0.71% to 7,730, and the Dow Jones Industrial Average rose 0.20%.

A strategic caveat emerged concerning the China market. Nvidia confirmed its first H200 sales into the country, yet these represented less than 1% of the $89 billion in data-center revenue, and future guidance entirely omits China data-center compute. This distinction prompts diverging interpretations: some view it as unconstrained upside, while others identify the Western supply-constrained buildout as the singular, critical dependency for continued growth.

In Other News

Anthropic's compute strategy solidifies ahead of IPO. Anthropic executed a six-year, approximately $45 billion cloud agreement with UK infrastructure provider Nscale. This deal secures about 460 megawatts of Nvidia Vera Rubin capacity from a West Virginia data center projected to be operational by late 2027. The commitment represents roughly one-third of Nscale's Monarch Compute Campus and precedes Anthropic's expected October IPO at an estimated $2 trillion valuation, poised to be the largest public offering on record. This trend underscores a broader market dynamic of securing compute resources years in advance.

Enterprise software firms post robust earnings. Salesforce and CrowdStrike surged 22.6% and 20.5% respectively on Thursday, both exceeding financial expectations, with Okta also joining the rally. Salesforce reported $11.35 billion in revenue and disclosed a $2.6 billion gain attributable to its stake in Anthropic. This illustrates a distinct feedback loop where capital fueling AI labs subsequently impacts public software balance sheets. CrowdStrike delivered 25% revenue growth and raised its forward guidance. The trading session marked the most widespread positive movement across AI security and enterprise software sectors in over a year.

The AI economy's capital flow demonstrates circularity. Thursday's market activity highlighted the intricate financial interdependencies within the AI ecosystem: Nvidia supplies chips to emerging cloud providers like Nscale, who in turn lease capacity to AI developers such as Anthropic. The resulting valuation gains, as seen in Salesforce's Anthropic stake, then recirculate onto public software firms' balance sheets. This self-reinforcing capital flow has generated substantial paper wealth, yet critics increasingly describe it as a circular financing model susceptible to rapid unwinding if core demand falters.

X / Social Pulse

Discourse was polarized between a narrative of sustained, exponential growth and critical questions regarding the underlying funding mechanisms. Proponents amplified Nvidia's $442 billion market cap increase and Huang's 70% growth projections. Skeptics, conversely, continued to circulate diagrams illustrating the interconnected financing loops where Nvidia customers are implicitly funded by the very ecosystem they support. Salesforce's reported gain from its Anthropic stake prompted a common market adage: "own the picks and the miners." The update on China—H200 sales under 1% of data-center revenue with zero market assumption in guidance—divided opinion, with some viewing it as pure upside and others as a critical vulnerability to the core growth story.

One to Watch

Anthropic's IPO: A market validation inflection point. Anthropic's anticipated October IPO represents a crucial market test for the entire AI infrastructure buildout. A ~$2 trillion debut would serve as a powerful validation of the escalating compute commitments, including the $45 billion Nscale deal and earlier Fractile inference investments. This event would solidify the valuations that underpin the AI economy's capital flywheel. However, a softer IPO pricing would inevitably prompt a re-evaluation of every downstream valuation linked to Anthropic's mark, including Salesforce's recent paper gain. Attention is now focused on whether Anthropic converts its confidential draft into a public S-1 filing in the coming weeks.

Quick Hits

Nvidia's latest results delivered the market validation required, leading to a renewed broad-based commitment to the AI complex. The fundamental question, however, has evolved beyond demand itself and now centers on the financial circularity inherent in the ecosystem: distinguishing genuinely new capital inflows from the continuous re-allocation of existing funds between the core labs, their infrastructure providers, and the foundational chip manufacturers.

Sources

Lock in. M. mazen@thorterminal.com

Read more