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Exclusive Headlines
Nvidia's Growth Is Increasingly Financed by Nvidia Itself
Nvidia's fiscal Q2 delivered numbers that would have settled most arguments outright. Revenue reached $96.2 billion, more than double a year ago. Data Center revenue was $89 billion, up 117%. Adjusted EPS of $2.22 beat the $2.09 consensus.
Jensen Huang told analysts fiscal 2028 revenue growth would run near 70%, then added actual demand is running well above that figure. He framed the gap as a hard physical constraint: building the power, land, and data center shells takes two to three years. Pressed on how much higher unconstrained demand might be, Huang would only say a lot higher without giving a number. Asked to rank supply bottlenecks, he declined, saying the entire supply chain is stretched simultaneously.
Huang cited a specific economic argument for the buildout: revenue per gigawatt rising from roughly $18 billion on Hopper to $25 billion on Blackwell to a projected $40 billion on Vera Rubin. Each generation extracts more revenue from the same infrastructure footprint. Kress said China accounted for less than 1% of Data Center revenue and confirmed the Q3 guide assumes zero China data center compute revenue going forward.
Gross margin held at 75% but is guided to 74% next quarter with a floor as low as 71% by Q4 before recovering. Kress attributed pressure to "extreme pricing conditions in memory," costs running ahead of internal expectations. Whether the three to four point step down is temporary or the start of structural erosion is genuinely open.
Alongside earnings, Nvidia disclosed roughly $18 billion in additional equity investments across the AI ecosystem this year, plus more than $500 billion in third-party infrastructure financing arranged through partnerships. AWS expanded its relationship to deploy 2 million additional GPUs, tripling a prior commitment. Nvidia closed the quarter with $99 billion in cash against $39 billion in debt.
The burden of proof has moved. From whether AI compute demand is real, which this quarter settled, to whether Nvidia can keep supplying and financing that demand without the economics working against it.
Foot Locker's Losses Erased DICK's Strongest Quarter in Years
DICK'S Sporting Goods delivered one of its best quarters in years and watched investors erase nearly a third of the company's market value in a single day. The retailer's core DICK'S banner grew comparable sales 4.9%, faster than a year ago, built on higher spending per visit and more shoppers walking through the door. Gross margin at the DICK'S banner improved. None of that sounds like a company whose stock should fall 31%, wiping out nearly $5 billion in market value.
The disconnect traces to one deal. Last September, DICK'S closed its roughly $2.4 billion Foot Locker acquisition. This quarter that bet went badly wrong. Foot Locker comparable sales fell 3.6%. The segment posted an operating loss of nearly $32 million. Three months ago DICK'S guided Foot Locker to $110 to $150 million in full-year operating profit. Now it expects a loss of $40 to $80 million. That is a complete reversal in one quarter.
Adjusted EPS fell to $3.53 from $4.38 against the $3.76 consensus. GAAP EPS fell nearly 26% to $3.50, with the gap reflecting integration costs.
Executive Chairman Ed Stack was direct. Brands turned unusually promotional, and DICK'S had to respond. Shoppers are still buying but chasing newer product while legacy franchises cooled. On Europe, Stack was blunter: the promotional environment there is worse than the U.S.
Management would not answer specific analyst questions. Wells Fargo's Ike Boruchow asked why a $200 million revenue cut to Foot Locker produced a roughly equal profit cut. Management gave qualitative answers, not a bridge. UBS's Michael Lasser asked whether there might be an opportunity to rightsize or monetize parts of Foot Locker. Stack's answer: "the answer to your question is simply, yes."
Full-year adjusted EPS guidance dropped to $11.00 to $12.00 from $13.50 to $14.50, a cut of roughly $2.50 at the midpoint. DICK'S banner comparable sales guidance was left unchanged at 2.5% to 4%.
A one-word "yes" to monetizing part of a $2.4 billion acquisition closed months earlier is the kind of admission that tends to resurface. The burden of proof on Foot Locker sits with the company.
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