Overview
Newer Analysis:Q2 FY2027 · Aug 26
Since the Report − 0.8%
Revenue grew 85.0% year over year, EPS beat the estimate by 5.6%; the stock fell 1.8% in its first reaction.
- RevenueQ1
- $81.62B
- ▲ 85% YoY · Record
- Data Center Revenue
- $75.2B
- ▲ 92% · 92% of Revenue
Verdict
BUYNVIDIA posted $81.62 billion of revenue in its fiscal first quarter, an 85% jump from a year earlier, with Data Center alone at $75.2 billion. The stock still fell 1.8% the next day: the $91 billion second-quarter outlook cleared expectations by 4.2%, but options had priced a 5.5% move. From here the focus shifts to Vera Rubin shipments, a gross margin near 75%, and China revenue still booked at zero.
Close on Report DayMay 20
$220.61▼ 1.8%Report-Day Move
- Market Cap(Today)
- ≈ $5.27 T
- 1Y Return(At Report)
- + 64%
- P/E(At Today's Price · $5.84 · Trailing 12M)
- 37.5
- Net Margin(Trailing 12M)
- 63.7%
Earnings Summary
In 30 Seconds- Revenue rose 85% year over year to $81.62B; data center reached $75.2B, or 92% of the total.
- Adjusted EPS of $1.87 beat the estimate by 5.6%; Q2 guidance of $91B sits 4.4% above expectations.
- Shares fell 1.8% the day after earnings, falling short of the large move the options market had priced in.
The Numbers
Networking Revenue
$14.8B
▲ 199% YoY
Earnings Per Share (Adjusted)
$1.87
Estimate $1.77 · Beat by 5.6%
Gross Margin (Adjusted)
75.0%
Flat Sequentially · at Record Scale
Q2 Revenue Guidance
$91.0B
± 2% · ▲ 95% YoY
Quarterly Revenue ($ Billion)
44.06
Q1 FY26 · $44.1 B
46.74
Q2 FY26 · $46.7 B · QoQ + 6.1%
57.01
Q3 FY26 · $57.0 B · QoQ + 22.0%
68.13
Q4 FY26 · $68.1 B · QoQ + 19.5%
81.62
Q1 FY27 · $81.6 B · QoQ + 19.8% · YoY + 85.2%
89.2–92.8
Q2 FY27 · 89.2–92.8 · QoQ + 11.5% · YoY + 94.7%
- Q1 FY26
- Q2 FY26
- Q3 FY26
- Q4 FY26
- Q1 FY27
- Q2 FY27
Q2 FY27 Guidance (Reported)
- Revenue89.2 – 92.8 billion89.2 billion92.8 billion
Midpoint 91.0 · Market Expectation 87.2Midpoint 4.4% Above Estimate ▲
- Gross Margin (Adjusted)74.5% – 75.5%74.5%75.5%74.5% – 75.5%
Midpoint 75.0% · 75.0% in Q1Flat Trajectory
- Operating Expenses (Adjusted)8.3 billion
Q1 Guidance Was 7.5 BillionInvestment Accelerating 10.7% ▲
- China Data Center Revenue0 billion
Licences Granted, No Revenue BookedAssumed Zero
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±4.8% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Compute & Networking$74.6 BShare 91.3%▲ 88.0% YoY
- Graphics$7.07 BShare 8.7%▲ 58.0% YoY
Key Metrics
Free Cash Flow
$48.6 B
▲ 85.8% YoYPress Release
Operating Cash Flow
$50.3 B
▲ 83.6% YoYPress Release
Inventories
$25.8 B
Press Release
Supply Commitments
$119 B
8-K
Share Repurchases (Quarter)
$19.3 B
Press Release
Additional Buyback Authorization
$80.0 B
Press Release
Shares are computed over the segment total: $81.6 B. Source: 8-K.
Metrics come only from the company's own filings; each one names the document it was taken from.
“The buildout of AI factories—the largest infrastructure expansion in human history—is accelerating at extraordinary speed. Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries.”
- Demand Has Gone Parabolic
- Vera Rubin Starts in Q3
- $1 Trillion of Orders Through 2027
Summary and Review
Summary
NVIDIA's revenue climbed to $81.62 billion, up 85% year over year and 20% sequentially. The Data Center platform grew 92% to $75.2 billion. The networking line inside it reached $14.8 billion, a 199% increase. Adjusted earnings per share came in at $1.87, beating the $1.77 expectation by 5.6%. Adjusted gross margin was 75.0%. Free cash flow rose to $48.6 billion. A new $80 billion repurchase authorization was approved and the quarterly dividend went from $0.01 to $0.25.
The report beat on every line, yet the stock fell 1.8% the day after the May 20 close of $220.61. The $91 billion second-quarter outlook sat 4.2% above expectations. But options had priced a 5.5% move for earnings day. The stock had hit an all-time high of $235.47 on May 14, up 13.7% in three months. Inventory jumped to $25.8 billion and China compute revenue was zero. The problem was not the quarter but the height of the bar.
We score the quarter 88 out of 100; that grades the earnings report, not the stock. Revenue, earnings, margin and guidance all beat. Committed supply rose to $145 billion; the constraint is supply, not demand. Against that stand three reservations: five or six hyperscale customers are half of data center revenue, the China door is shut, and each builds its own accelerator. Vera Rubin starts shipping in the third quarter. On valuation the stock trades below its growth rate.
Full Review
92% of revenue now comes from one platform.
With this quarter NVIDIA collapsed its reporting into two platforms: Data Center and Edge Computing. Data Center grew 92% year over year and 21% sequentially to $75.2 billion, making up 92% of total revenue. Within it, compute rose 77% to $60.4 billion while networking climbed 199% to $14.8 billion. Networking growing three times faster than the company average is no accident: customers no longer buy individual chips but rack-scale systems stitched together with NVLink and Spectrum-X. That lifts the average price of every rack sold and is the part rivals find hardest to copy. Gaming, professional visualization and automotive now sit inside a $6.4 billion Edge Computing line; it grew 29% year over year but accounts for just 8% of revenue. NVIDIA has effectively become a single-segment company.
Supply, not demand, is the binding constraint.
According to CFO Colette Kress, total committed supply -including inventory, purchase commitments and prepaids- rose to $145 billion. That is roughly twice a single quarter's $81 billion of revenue, meaning NVIDIA has already bought the next four or five quarters. Jensen Huang said on the call that he expects to be supply constrained throughout Vera Rubin's life. The company repeated that it sees $1 trillion of Blackwell and Rubin revenue from 2025 through calendar 2027. Inventory rose from $21.4 billion to $25.8 billion in one quarter, preparation for the coming ramp but also the riskiest line item during an architecture transition. NVIDIA reallocating its China-bound H200 manufacturing capacity to Vera Rubin tells the same story: the fab is the bottleneck, not the customer. This is the demand-side counterpart of the supercycle we covered in memory and storage suppliers like SanDisk and Western Digital in our earnings archive.
Gross margin held at 75%, but not for free.
GAAP gross margin was 74.9% and adjusted gross margin 75.0%, both essentially flat sequentially. Holding that margin at an $81 billion revenue scale is the most concrete evidence of pricing power. The company guides to 75.0% (plus or minus 50 basis points) for the second quarter and still expects to stay around 75% for the full fiscal year. The real pressure comes from memory: HBM and DRAM prices are rising while the share of third-party components inside rack-scale systems keeps growing. A year ago, in fiscal Q1 2026, margin fell into the 60s. The cause was a $4.5 billion charge for H20 inventory that could not be shipped to China. This year's 75% shows how quickly that recovered. Even so, pushing margin higher from here is difficult; the story is now volume, not margin expansion.
China is zero; customer concentration is the risk.
China data center compute revenue was zero in the quarter. Washington approved H200 shipments in December 2025, yet not a dollar has been recognized. Kress said they are uncertain whether imports will be allowed in. So no China revenue sits in the second-quarter outlook. Capacity earmarked for China H200 units was shifted to Vera Rubin. With the bar at zero, every dollar from here is upside surprise. The second reservation is customers: $38 billion of hyperscale revenue, about half of data center revenue, rests on five or six buyers. All of them -Microsoft, Meta, Google, Amazon- are building their own AI accelerators. Huang counters that hundreds of thousands of other companies exist worldwide. Near term, a slowdown at a handful of customers would show up directly in revenue. Viewed through diversification, the risk in a single stock can be larger than it looks.
Capital returns suddenly got serious.
NVIDIA distributed roughly $20 billion through buybacks and dividends during the quarter. On May 18, 2026 the board approved an additional $80 billion repurchase authorization; together with the remaining prior authorization, total capacity reaches $118 billion. The quarterly dividend was raised from $0.01 to $0.25 per share, a 25-fold increase. For a company that paid a symbolic dividend for years, that is a change in posture. The reason sits in cash flow: the quarter produced $50.3 billion from operations and $48.6 billion of free cash flow. At that pace the company is heading toward nearly $190 billion of annual cash generation, and it can direct much of that to buybacks rather than reinvestment. For the next quarter watch one line: how much free cash flow rises from $48.6 billion.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- Data center revenue grew 92% year over year to $75.2 billion, with networking alone up 199%.
- Adjusted gross margin held flat at 75.0%Sustaining that at an $81 billion scale is proof of pricing power.
- Free cash flow reached $48.6 billion, turning roughly 60% of quarterly revenue into cash.
- Total committed supply rose to $145 billion, and the company says it sees $1 trillion of Blackwell and Rubin revenue through 2027.
- A new $80 billion repurchase authorization and a 25-fold dividend increase mark a shift in capital return posture.
- Second-quarter revenue guidance of $91 billion came in 4.2% above market expectations.
Risks
6- Five or six hyperscale customers account for roughly half of data center revenue, and those same customers are building their own accelerators.
- Data center revenue booked from China was zeroDespite granted licences, the company put no China revenue in its second-quarter outlook.
- Inventory jumped from $21.4 billion to $25.8 billion in one quarterWrite-downs during architecture transitions have already happened once.
- The Vera Rubin transition starts in the third quarter, and yield and logistics problems are common in new platform ramps.
- Rising memory and HBM prices put downward pressure on the gross margin path.
- Expectations are so high that a quarter beating on every line can still send the stock lower.
What to Watch
5- August 26, 2026 - fiscal second-quarter results: the first test of the $91.0 billion outlook, the China-free scenario and the 75% gross margin.
- August-October 2026 (fiscal Q3) - first Vera Rubin shipments begin; the volume ramp is planned for the fiscal fourth quarter.
- Late 2026 - whether any revenue is booked from H200 shipments to China, a line that now counts as upside surprise.
- February 2027 - fiscal fourth-quarter and full-year 2027 results: the first major reckoning for the $1 trillion Blackwell and Rubin order target.
- March 2027 - GTC developer conference, the annual event where the new architecture roadmap is unveiled.
Upcoming Earnings
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