After the market close on May 20, Nvidia delivered its Q1 FY27 results:
- Revenue: $81.6 billion, up 85% year-over-year, beating Wall Street's $78.9 billion estimate by nearly $3 billion.
- Net income: $58.3 billion, with GAAP EPS of $2.39 versus the expected $1.75.
- Next-quarter guidance: $91 billion, above the analyst consensus of $87.3 billion.
The earnings themselves are no longer the main focus.
The real shocker: Data center segment
Revenue breakdown:
- Data center total: $75.2 billion, +92% YoY
- Compute chips: $60.4 billion, +77%
- Networking: $14.8 billion, +199%
- Edge computing: $6.4 billion, +29%
Networking revenue tripled in a year, largely driven by Spectrum-X Ethernet switches and high-speed interconnects for Blackwell systems. In AI factories, the most valuable asset is no longer just the GPU, but how GPUs are connected.
Gross margin held at 74.9% GAAP. For a hardware company to maintain such margins indicates that capacity still cannot meet demand.
'Largest infrastructure build in human history'
Jensen Huang kept his press release statement brief but impactful:
'The expansion of AI factories — the largest infrastructure build in human history — is accelerating at an extraordinary pace.'
In plain terms: he is not signaling any slowdown in demand.
To reinforce the message, the company authorized an additional $80 billion in share repurchases with no expiration date. In Q1 alone, it returned $20 billion to shareholders via buybacks and dividends. The quarterly dividend was raised from $0.24 to $0.25 — symbolic but consistent with the buyback, projecting a 'cash-rich' posture.
China remains a blank
In the guidance, Huang cautiously noted: Q2 does not include any data center compute revenue from China.
This aligns with his recent CNBC interview: 'In the AI chip market, we have essentially ceded China to Huawei.'
The Trump administration recently approved Alibaba, Tencent, and ByteDance to purchase H200 chips, but whether Chinese customers can accept or will buy remains uncertain. So Huang zeroed out that segment, leaving upside beyond guidance for the market to ponder.
Asian markets rally overnight
On May 21, Asian semiconductor stocks surged:
- SoftBank +19.8%, adding about $35 billion in market cap in a single day
- TSMC +2%
- Tokyo Electron +5.44%
- Renesas +7%
- SK Hynix +8%
SoftBank's sharp rise stems from its stake in Arm (royalties on AI chip designs) and its equity in OpenAI (AI applications), which generated $45 billion in paper gains last year. Nvidia's earnings essentially validated the entire AI capital narrative.
How to read this earnings report
A year ago, the market worried about whether Blackwell production could keep up.
This quarter's data shows: Blackwell now accounts for nearly 70% of data center compute revenue, with Hopper largely phased out. The next-generation Vera Rubin is still on track for the second half of 2026.
The guidance jump to $91 billion is more noteworthy. Moving from $81.6 billion to $91 billion in one quarter implies that Nvidia has visibility into Q2 orders — not speculation, but signed contracts.
As for who will be the next winner from AI infrastructure spending, this quarter's answer is: everyone standing alongside Nvidia.
Sources: NVIDIA Announces Financial Results for First Quarter Fiscal 2027 (NVIDIA Investor Relations); CocoLoop; Nvidia Q1 result beats Wall Street estimates on massive AI chip demand (Business Standard); SoftBank Group shares soar over 16% as Nvidia earnings signal strong AI momentum (CNBC); Nvidia Q1 2026 revenue soars 85% on surging AI chip demand, beats Wall Street expectations (Gulf News)