Nvidia reported a clean top- and bottom-line beat and provided current quarter revenue guidance that beat expectations. The chipmaker also unveiled a new $80 billion share buyback program and made changes to its reporting structure.  

“A solid beat/raise from NVDA, though its $91bn outlook is inline with bullish expectations, leading to usual post-call volatility,” BofA analyst Vivek Arya said, pointing to the fact that Nvidia stock has declined 3 of last 4 earnings calls. “We ignore this noise,” he added after raising the price target to $350 per share. 

Shares of the world’s largest publicly listed company were slightly lower in premarket trading on Thursday, last down 0.5%.

Since the explosion of artificial intelligence technology in late 2022, Nvidia has become the premier manufacturer of high-end, powerful graphics processing units (GPUs) that powers AI and has come to dominate the AI hardware market. Nvidia’s market capitalization has exploded in the last three years to over $5 trillion, and its quarterly reports have become market-moving events that are closely scrutinized for a read on the AI space.

“I’ve been hoping that the shares make a big move in one direction or another, but NVDA has almost exclusively traded at very slightly lower levels since we learned the results. This is despite – or maybe because – the company beat consensus revenue and EPS estimates,” Steve Sosnick, chief strategist at Interactive Brokers, told Investing.com.

“It shows how much good news is baked into NVDA ahead of each earnings report,” he added.

A furious rally in the AI trade has played a driving role in helping Wall Street return to record levels this year. Notably, the Philadelphia Semiconductor Index – seen as a barometer for chip stocks – posted an 18-day win streak from the end of March till the end of April, the longest such run in its history.

The AI trade helped U.S. equities scale record levels despite a protracted conflict between Washington and Iran and a global bond sell-off driven by increased expectations for interest rate hikes across the world to combat the inflationary shock emerging from surging oil prices. Rising rates historically tend to have an outsized effect on technology stocks because their massive valuations rely heavily on profits expected in the future.

Earlier in the earnings season, quarterly results from other megacap tech firms and Nvidia’s Magnificent 7 peers such as Alphabet and Meta Platforms showed plans for heavy spending on building the infrastructure required to power AI systems. Against this backdrop, expectations for NVDA were sky high going into Wednesday’s report.

“NVIDIA posted numbers higher than our estimates and our preview, with a clean beat and raise on all metrics, with a significant Vera Rubin ramp ahead that should prove out their contention that NVDA hardware leads in AI factory economics,” Morgan Stanley analyst Joseph Moore wrote in a client note.

Moore sees Nvidia stock as offering the “best value” in all of the semiconductor sector.

“Market share rhetoric is likely hitting a low point, with Vera Rubin providing an answer to key competitive questions, and understanding that the elevated benchmark weighting presents certain headwinds, but valuation at about half of AI peers really does stand out,” he added.

Nvidia Q1 earnings

Santa Clara, California-based Nvidia earned $1.87 per share on an adjusted basis on revenue of $81.62 billion for its fiscal Q1 2027. Analysts had expected a profit of $1.77 per share on revenue of $79.19 billion. 

On a GAAP basis, NVDA earned $2.39 per share. The chipmaker’s adjusted gross margin improved 14.2 basis points Y/Y to 75%, but slipped marginally by 1 basis point Q/Q. The figure matched Street expectations. 

“Perhaps there is some disappointment that NVDA neither reported gross margins above 75%, nor (guided) them higher. But it’s quite something to yawn at 75% gross margins!” Interactive Brokers’ Sosnick told Investing.com.

“The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed,” CEO Jensen Huang said in a statement.

“Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries. NVIDIA is uniquely positioned at the center of this transformation as the only platform that runs in every cloud, powers every frontier and open source model, and scales everywhere AI is produced — from hyperscale data centers to the edge,” Huang added.

Nvidia issued Q2 revenue guidance of $91 billion, plus or minus 2%. Analysts had expected revenue of $87.36 billion.

Additionally, the company said its board of directors had approved a new $80 billion share repurchase program, and that it was increasing its quarterly cash dividend to 25 cents per share from 1 cent per share. 

Changes to reporting framework

Nvidia also said it was making some changes to its reporting structure. 

“We specialize in markets where our computing platforms can provide tremendous acceleration for applications. These platforms incorporate processors, interconnects, software, algorithms, systems, and services to deliver unique value. Following the rapid evolution in our businesses, we are transitioning to a new reporting framework that better reflects our current and future growth drivers,” NVDA’s finance chief said in prepared commentary.

The company will now break out its revenue performance under two market platforms – “Data Center” and “Edge Computing.” Earlier, the structure involved five market platforms. Data Center remains the flagship platform.

“Within Data Center, we will report two sub-markets, Hyperscale and ACIE which incorporates AI Clouds, Industrial, and Enterprise. Hyperscale will include revenue from the public clouds and the world’s largest consumer internet companies, while ACIE addresses our growth opportunity in diverse AI purpose-built data centers and AI factories across industries and countries,” the CFO said.

“Edge Computing highlights devices for agentic and physical AI including PCs, game consoles, workstations, AI-RAN base stations, robotics and automotive,” the executive added.

Under the new sub-markets, Data Center revenue for NVDA’s fiscal Q1 2027 surged 92% Y/Y to a record $75.25 billion.

China concerns

While Nvidia largely has a history of blowing away investor and analyst expectations, one of the areas of concern for the company is China. A combination of strict U.S. export controls along with a Chinese push to replace foreign made AI hardware with domestic products has effectively eradicated Nvidia’s market share in the Asian nation.

NVDA top boss Huang last week travelled to China with President Donald Trump, sparking hopes of positive developments on chip sales to China. However, no such breakthroughs emerged.

The company on Wednesday said no shipments of Data Center Hopper products to China occurred in the quarter, compared to $4.6 billion in the same quarter a year ago. The chipmaker’s Q2 revenue guidance also assumed no Data Center compute revenue from China.