Nvidia aims for $1 trillion in revenue in fiscal year 2028? Igniting new expectations on Wall Street.

Nvidia once again shocked the market with better-than-expected results and released a long-term outlook that prompted Wall Street to reprice its products.

In its latest earnings call, the company projected revenue growth exceeding 70% for the fiscal year ending January 2028, significantly higher than the approximately 45% market consensus estimate from FactSet. This forward guidance was described by TD Cowen analyst Joshua Buchalter as a "potentially significant catalyst for the stock price," directly driving Nvidia's stock price up 8.7% on Thursday—its largest single-day gain since May 2024. At the close of trading that day, Nvidia's market capitalization rose to $5.49 trillion, an increase of $441.5 billion in a single day, marking the company's second-largest single-day market capitalization increase in history.

More notably, some analysts have set their sights even further ahead. Raymond James analyst Simon Leopold wrote in a research report that Nvidia achieving $1 trillion in revenue in the fiscal year ending January 2029 "appears to be possible," while FactSet's market consensus forecast as of Wednesday was less than $750 billion for that year.

70% growth guidance: A conservative forecast under supply constraints

Nvidia management explicitly stated in the earnings call that the 70% growth forecast already factored in supply constraints, and the actual figure would be even higher if supply bottlenecks did not exist. JPMorgan Chase also pointed out that although the earnings guidance has far exceeded expectations, it may still be a conservative estimate. The company has clearly characterized the current situation as "supply constrained," and if supply were unconstrained, the actual demand pace would be significantly higher.

Goldman Sachs analyst James Schneider believes that if Nvidia continues to work with technology companies to advance data center construction and further bridge the gap between customer demand and supply, the company is expected to exceed guidance in fiscal year 2028.

Regarding gross margins, Nvidia expects some compression for the remainder of the current fiscal year, but also forecasts that gross margins will remain stable in the 72% to 73% range for the next fiscal year. Simon Leopold believes that while this level is lower than recent highs, it is enough to dispel market pessimism, noting that considering rising memory chip prices and increased competition in custom chips, the guidance range is "better than the worst-case scenario."

Rubin Platform and Ecosystem Moat: Multiple Growth Engines Take Shape

Buchalter interpreted this guidance as a "strong signal of confidence" from Nvidia regarding its business visibility, given that the company's next-generation chip platform, Vera Rubin, has begun mass production and shipping. Vera Rubin is Nvidia's next-generation AI chip platform after Blackwell.

Bernstein analyst Stacy Rasgon said Nvidia's July quarterly results "should remind investors why they hold the stock." In his research report, he noted that demand is accelerating, a trend that coincides with the Rubin platform becoming "the largest upcoming product cycle in Nvidia's history."

Rasgon also emphasized that Nvidia's balance sheet is becoming "a moat as important as its technology." The company not only locks in customers for its products, worth hundreds of billions of dollars, through equity investments and revenue-sharing agreements, but is also able to "support and grow the ecosystem around its products."

Simon Leopold believes that Vera Rubin chip revenue is expected to reach approximately 20% of data center revenue in the third fiscal quarter. Meanwhile, Groq 3 LPX is already at full production capacity and will begin mass shipments later this quarter, with emerging cloud service provider Nebius among the first adopters. The production ramp-up rate for both Rubin and LPU is faster than previously predicted, leading to upward revisions in related estimates.

Simon Leopold further pointed out that Nvidia's progress in the CPU business has also exceeded expectations . Grace CPU's rolling revenue over the past twelve months has surpassed $5 billion, and the next-generation Vera CPU is currently at full production capacity. Based on order books, Nvidia's annualized revenue from its CPU business has reached $20 billion, and with continued improvements in supply, CPU revenue is expected to more than double in fiscal year 2028.

Wall Street remains divided between bulls and bears, but bulls are accumulating more leverage.

Despite Nvidia's strong performance boosting bullish sentiment, market divergences have not been completely eliminated. Buchalter admitted that Nvidia's strategy of providing financing support to ecosystem partners is "unlikely to convince the bears," but he himself holds a "constructive" view on the sustainability of diversified AI infrastructure spending and Nvidia's role as a "core enabler."

Overall, Buchalter believes the earnings report "scored more on the bulls" and states that Nvidia's stock is "significantly undervalued." Goldman Sachs' Schneider adds that the outlook "may alleviate investor concerns about high capital expenditure costs."

Analysts predict Nvidia's revenue will reach $403.5 billion this fiscal year. Whether Nvidia can translate supply constraints into room for growth, moving from the current fiscal year to its $1 trillion target, will be a key variable determining whether this expectation can be realized.

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