Original Author: SoSoValue Research
NVIDIA released its Q1 FY2027 results. The Q1 performance and Q2 guidance basically met the optimistic expectations of buyers, but the share buyback was slightly below investor expectations. The stock price fell slightly by 1.3% after hours, as the market lacked short-term catalysts, but the long-term growth thesis remains clear.
Q1 Performance Highlights: Solid and in Line with Optimistic Expectations
NVIDIA's Q1 revenue was $81.62 billion, an 85% year-over-year increase and a 20% sequential increase, basically within the buyer's optimistic expectation range of $81-82 billion and higher than the Bloomberg consensus estimate of $78.91 billion. Adjusted gross margin was 75%, up 14.2 percentage points year-over-year, matching the Bloomberg consensus estimate of 75.1%. Adjusted net profit was $45.55 billion, up 139% year-over-year. Adjusted EPS was $1.87, higher than the Bloomberg consensus estimate of $1.77.
This quarter, NVIDIA restructured its revenue segments into Data Center and Edge Computing to better reflect the AI-driven business structure. Within Data Center, hyperscale customer orders are the core growth driver:
- Data Center revenue was $75.2 billion, up 92% year-over-year and 21% sequentially, higher than the Bloomberg consensus estimate of $73.33 billion.
- Hyperscale (including public cloud and large internet companies) revenue was $37.9 billion, up 115% year-over-year, accounting for 50.4% of Data Center revenue. It is the fastest-growing segment and the most important driver of NVIDIA's revenue.
- ACIE (AI Cloud, Industry, and Enterprise Applications) revenue was $37.4 billion, up 74% year-over-year, accounting for 49.6%.
- Edge Computing (Agent & Physical AI, including PC, consoles, workstations, AI-RAN base stations, robots, and automotive) revenue was $6.4 billion, up 29% year-over-year and 10% sequentially.
Earnings Call: Vera CPU is the Most Core Incremental Information
The conference call revealed that the Vera CPU opens up a new $200 billion market for NVIDIA. Designed for Agentic AI, the Vera CPU can be sold alongside the Rubin GPU or independently as a CPU, storage node, or security node. Total CPU revenue is expected to approach $200 billion this year, with mass production and shipping planned to begin in Q3; it represents a new incremental business for NVIDIA.
Management maintained the $1 trillion revenue target for the Blackwell + Rubin platforms from 2025-2027, without an upward revision for now. The Rubin platform will begin mass production in the second half of the year, starting in Q3 with ramp-up in Q4. Shipments are expected to increase significantly in Q1 next year.
Furthermore, Chinese revenue continues to be excluded from guidance. The U.S. government has approved shipments of H200 to Chinese customers, but it's uncertain whether China will allow the imports.
Q2 Guidance Basically Meets Expectations
- Q2 revenue guidance is $91.0 billion (±2%, excluding any contribution from China), matching the buyer's optimistic expectation of $91.0 billion.
- Adjusted gross margin is guided to be 75% (±0.5%), basically meeting expectations.
However, buyback was slightly below expectations: The company authorized an additional $80 billion for share repurchases and raised the quarterly dividend to $0.25 per share (from $0.01 previously), slightly below some investors' expectations for over $100 billion in new buyback authorization.
