Nvidia Raises Fair Value as AI Spending Accelerates

Nvidia reported fiscal second-quarter revenue of $96 billion, up 106% year over year, and forecast 70% revenue growth for fiscal 2028, implying nearly $700 billion in total revenue. Morningstar raised its fair value estimate to $310 from $280. The company expects October-quarter revenue of $108 billion, exceeding consensus estimates. Nvidia attributed its strong forecast to accelerating AI demand, noting its top five US hyperscaler customers will spend $1.3 trillion on AI capital expenditures next year. Gross margin is projected to decline due to rising memory prices. Shares rose 4% but remain undervalued, according to Morningstar, as the market appears skeptical about future AI spending. Nvidia's forecast is supply-constrained, suggesting it could be conservative. AI token usage continues to rise exponentially, with high GPU rental prices indicating persistent demand.