Nvidia's Blowout Q2 Results Spark Neocloud Stocks Surge Amid Warning of Potential Crash

Nvidia's second-quarter results exceeded expectations, causing shares of CRWV, NBIS, and IREN to surge overnight. The company reported adjusted earnings of $2.22 per share on revenue of $96.2 billion, beating estimates of $2.09 and $92.18 billion, respectively.

Data Center revenue jumped 117% from a year ago to $89 billion, with ACIE segment revenue growing 138% to $40 billion, driven partly by neoclouds adding capacity for enterprises, AI startups, and sovereign customers.

Nvidia expects its neocloud partners to exit 2026 with eight gigawatts of installed capacity, up from three gigawatts at the end of 2025. CFO Colette Kress stated that customer forecasts indicate the company's growth could double next year, although supply constraints mean Nvidia expects to deliver about 70% growth.

Palo Alto CEO Nikesh Arora warned that neocloud valuations could collapse once supply and demand normalize, predicting that in two years from now, you will be able to buy a neocloud for less than they raise at today.