Nvidia reported second-quarter fiscal 2027 results after the US close on 26 August, and the headline numbers landed where the market expected: $96.2bn of revenue, $89.0bn of it from data centre, and a third-quarter outlook of $108.0bn give or take 2%. The number that deserves attention is not in the headline. It is in the reconciliation table at the back.
GAAP came in above adjusted
Nvidia posted GAAP diluted earnings per share of $2.46 and non-GAAP diluted earnings per share of $2.22. Companies almost never report it in that order. Non-GAAP figures normally sit above GAAP, because the adjustments strip out stock compensation, amortisation and other costs that management regards as non-operational. Here the adjustment runs the other way, and one line explains it: Gains from equity securities, net, at $(7,771)m for the quarter — subtracted, not added, on the path from GAAP to adjusted.
What the line actually is
That $7.8bn is the mark-to-market movement on stakes Nvidia holds in other companies, not money earned selling accelerators. Nvidia has spent two years taking positions across the AI supply chain and its own customer base, and in a quarter when those holdings appreciate, the gains land in GAAP net income. Management's own definition of operating performance excludes them, which is why the reconciliation removes them. Roughly a tenth of the reported GAAP profit for the quarter comes from securities Nvidia owns rather than products it shipped.
What the common framing gets wrong
Coverage of a quarter like this defaults to "Nvidia beat on earnings," and readers reasonably take earnings per share to mean money made selling things. On this occasion the two available EPS figures disagree by 24 cents, or about 11%, and the higher of the two is the one carrying the equity gains. Quoting the GAAP figure as evidence of operating strength attributes to the chip business a profit that came from Nvidia's investment portfolio. Nvidia is not hiding this — the line is right there in the table, and the company's own adjusted figure excludes it. The distortion is entirely in the retelling.
The number underneath
The more consequential disclosure is on the other side of the balance sheet. Nvidia's purchase commitments now stand at $279bn, up roughly 2.3x from the $119bn it had secured through the end of the previous quarter. Those commitments span the remainder of fiscal 2027 out through fiscal 2029, which means the figure is not a quarter's spending and should not be read as one. It is Nvidia locking down DRAM, HBM, flash and packaging capacity years ahead against a supply chain it has said repeatedly is the binding constraint. Gross margin guidance of 74% for the coming quarter, down from 75% reported, is what paying up for that capacity looks like on the income statement.