Nvidia's Vera Rubin enters production as Q2 guidance reaches $91 billion

Jensen Huang staked Nvidia's product cycle credibility on Vera Rubin being "already in production" with "giant" volumes, directly refuting a research report that claimed manufacturing delays.

Nvidia's next-generation Vera Rubin AI accelerator system is already in production, Chief Executive Officer Jensen Huang said, directly refuting a research report that claimed manufacturing setbacks would delay the platform.

"Vera Rubin is already in production. Giant amounts of production incoming," Huang told reporters Wednesday on the sidelines of a developer event in Tokyo, according to Bloomberg. The chief executive delivered a one-word dismissal of the SemiAnalysis findings before elaborating on production volumes.

The July report from research firm SemiAnalysis — which has built a reputation for detailed Nvidia supply chain analysis — said the Vera Rubin AI server rack system faced delays due to difficulties manufacturing a specialized circuit board that connects electronic modules within the rack. The packaging complexity cited, a bottleneck that has historically constrained next-generation accelerator systems, would have pushed the platform into 2028, according to the report.

The Vera Rubin cycle carries outsized importance for Nvidia investors. The company's Data Center revenue reached $75.2 billion in fiscal Q1, up 85% year over year, and Morgan Stanley recently raised its Rubin rack-system price assumption to about $49 billion per gigawatt — implying materially higher customer spending per deployment than the current Blackwell generation.

The Numbers Behind the Denial

Nvidia's Q1 FY2027 results set a high bar for Rubin to clear. Revenue hit $81.6 billion, up 85% year over year, with Data Center contributing $75.2 billion and Networking revenue rising 199%. Non-GAAP gross margin came in at 75%, and free cash flow reached $48.6 billion in the quarter.

The company has $119 billion tied to supply-related commitments and is guiding for $91 billion in Q2 revenue, a forecast that excludes any China Data Center compute sales. Huang framed the buildout as generational: "The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed," he said on the Q1 earnings call.

Manufacturing partner Taiwan Semiconductor Manufacturing Co. (TSMC) is signaling similarly robust demand. June revenue jumped 68% year over year to NT$442.7 billion, and TSMC is adding three new advanced packaging facilities in Chiayi Science Park Phase II to relieve CoWoS (chip-on-wafer-on-substrate) bottlenecks that have constrained AI accelerator supply.

Japan's AI Pivot and the China Factor

The Tokyo setting for Huang's remarks was not incidental. Japan's Prime Minister Sanae Takaichi has unveiled an unprecedented $2.3 trillion spending plan aimed at encouraging private sector investment in domestic AI, and SoftBank Group has separately announced a $5.4 billion deal to acquire ABB Ltd.'s robotics unit. For Nvidia, whose physical AI and robotics platforms are increasingly central to its pitch beyond the data center, Japan represents a strategically important market.

Huang also addressed the status of Nvidia's H200 chip shipments to China, an issue that has drawn significant investor attention since Washington eased export restrictions. The H200 was cleared for export by President Donald Trump in December, Bloomberg reported, marking a notable relaxation of controls designed to limit Beijing's access to advanced AI hardware. Until Blackwell-architecture chips arrived in late 2024, the H200 was the most powerful AI accelerator on the market, and its availability to Chinese buyers carries meaningful revenue implications for Nvidia.

Nvidia shares trade at $211.54, with a trailing price-to-earnings ratio of 32 times and a forward multiple of 24 times. The consensus analyst target sits at $301.62, with 48 Buy and 10 Strong Buy ratings against just 2 Holds. If Huang's "giant" volumes materialize on Rubin at Morgan Stanley's higher average selling prices, current forward estimates likely understate fiscal 2028 earnings power. The competitive stakes are equally high: any credible delay in Vera Rubin's ramp would have sharpened pressure from Advanced Micro Devices Inc.'s advancing MI350 and MI400 roadmap, making the chief executive's on-record rebuttal particularly consequential for investors who have priced Nvidia's product cycle into its elevated valuation.

This article is for informational purposes only and does not constitute investment advice.