NVIDIA CORP: revenue doubled, yet shares trade below their three-year average

On August 26, NVIDIA CORP reported results for the second quarter of fiscal 2027 (ended July 26, 2026): revenue grew 105.9% year over year to $96.2 billion, and net profit rose 125.9% to $59.7 billion. The shares fell 1.6% after the release but gained 8.1% by September 4. In our view, the stock looks attractive: the EV/EBITDA multiple of 27.3 is below its own three-year average of 37.8, and the portal's model implies upside of +39%.

Key takeaways

— Revenue doubled thanks to data centers, which brought in $89.0 billion

— EBITDA margin reached 67.4% versus 62.3% a year ago

— Net profit rose 126%, but part of it is paper

— Leverage remains low: net debt / EBITDA is 0.0

— Shares trade below their own three-year multiple

— The company returned $26.0 billion to shareholders in the quarter

Attractiveness

Key figures, USD bn

Revenue doubled thanks to data centers, which brought in $89.0 billion

In the second quarter of fiscal 2027, NVIDIA CORP's revenue reached $96.2 billion, up 105.9% year over year. The main driver was the Data Center segment: its revenue grew 117% to $89.0 billion, meaning almost all of the company's revenue now comes from AI infrastructure.

Growth accelerated compared with previous quarters: in the first quarter of fiscal 2026, revenue rose 85.2%, and in the second – already 105.9%. The company attributes this to the Vera Rubin platform entering full production and a broadening customer base: a year ago, mainly large labs were building out, whereas now demand is fueled by new AI startups and open models.

However, in its outlook for the third quarter, the company guides revenue of $108.0 billion and does not assume any Data Center compute revenue from China. This means the actual result could be higher if restrictions do not materialize or are relaxed.

EBITDA margin reached 67.4% versus 62.3% a year ago

EBITDA margin in the second quarter of fiscal 2027 reached 67.4% versus 62.3% a year earlier. Net margin rose even more, from 56.5% to 62.0%. The improvement is driven by operating leverage: revenue is growing faster than operating expenses, which increased only 55%.

Gross margin remained virtually unchanged from the previous quarter – 75.0% versus 74.9%. The company expects it to be around 74.0% in the third quarter, reflecting costs related to new product ramps and possible shifts in sales mix.

The high margin is not a one-off effect: it has held for several quarters, albeit with fluctuations. In the second quarter of fiscal 2026, EBITDA margin was 62.3%, in the third – 64.5%, in the fourth – 66.2%, and in the first quarter of fiscal 2027 – 66.8%.

Net profit rose 126%, but part of it is paper

Net profit for the quarter was $59.7 billion, up 125.9% year over year. However, this figure includes $7.8 billion of net gains from revaluation of equity securities – a non-operating item unrelated to the core business that could turn into a loss in the next period.

Excluding these effects, non-GAAP net profit was $54.0 billion, or $2.22 per share. The gap between GAAP and non-GAAP figures is much smaller than in the previous quarter, when revaluation contributed $15.9 billion.

Operating profit rose 124% to $63.7 billion, which is closer to the real dynamics of the business. This is the metric to watch when assessing the company's ability to generate profit in the future.

Leverage remains low: net debt / EBITDA is 0.0

At the end of the quarter, NVIDIA CORP's net debt stood at $10.9 billion, and the net debt / EBITDA ratio for the trailing twelve months was 0.0. This means the company hardly uses debt financing for growth: capital expenditures for the quarter were only $2.7 billion versus operating cash flow of $24.1 billion.

During the quarter, net debt rose by $1.2 billion, and over the year – by $43.0 billion. The increase is related to raising long-term debt of $24.9 billion and large shareholder payouts, but even so, leverage remains minimal.

Operating cash flow for the quarter was $24.1 billion – noticeably lower than in the previous quarter ($50.3 billion), but still far above investment needs. Free cash flow, by the company's calculation, reached $21.3 billion.

Shares trade below their own three-year multiple

The current EV/EBITDA multiple is 27.3 versus the three-year average of 37.8. This means the market values the company cheaper than its own average over the past three years, despite accelerating revenue growth and record margins.

The P/E for the trailing twelve months is 28.5, which also looks moderate for a company doubling its revenue. According to the portal's model, the upside is +39% – a calculation based on EBITDA growth and a target multiple, not a consensus forecast.

NVIDIA CORP shares are held in our US Leaders (FVC quality) and US Tech / AI leaders strategies. This is a fact, not an argument for a recommendation: inclusion is determined by each strategy's screen.

The company returned $26.0 billion to shareholders in the quarter

In the second quarter of fiscal 2027, NVIDIA CORP returned $26.0 billion to shareholders through share repurchases and dividends. Buybacks totaled $19.7 billion, and dividends – $6.0 billion. At the end of the quarter, the company had $99.0 billion remaining under its repurchase authorization.

The dividend yield over the trailing twelve months is only 0.12%, typical for a fast-growing technology company: shareholders earn mostly through capital appreciation, not payouts. Nevertheless, the company raised its quarterly dividend to $0.25 per share, payable on October 1, 2026.

Capital returns do not hinder investments: capital expenditures for the quarter were only $2.7 billion, and free cash flow – $21.3 billion. The company generates enough cash to fund growth and pay shareholders simultaneously.

Valuation on the latest reported figures

Bottom line

NVIDIA CORP's second-quarter fiscal 2027 report is strong: revenue doubled, EBITDA margin reached 67.4%, and leverage remains minimal. Part of net profit is paper, but operating dynamics confirm the business's sustainability. Shares trade below their own three-year multiple, and the portal's model implies upside of +39%. The main question for a holder is not the current report but the company's ability to sustain growth amid intensifying competition and possible export restrictions. As long as demand for AI infrastructure remains strong, the stock looks attractive.