Key Highlights
- Nvidia reported historic Q1 FY2027 revenue of $81.6 billion, marking an 85% increase year-over-year and surpassing analyst expectations of approximately $78.9 billion.
- Data Center segment generated $75.2 billion in revenue, representing a 92% YoY surge, with balanced demand from hyperscalers and enterprise/sovereign AI clients.
- Second-quarter revenue outlook landed at approximately $91 billion, a figure that excludes China data center sales amid export restriction concerns.
- Management authorized an $80 billion stock repurchase program and increased the quarterly dividend from $0.01 to $0.25 per share.
- NVDA currently trades at approximately 26.2x forward earnings — notably lower than the semiconductor industry median of roughly 34x — while analysts maintain an average price target near $303.
Nvidia (NVDA) reported the strongest quarterly performance in its history, but shares retreated following the announcement. Trading around $215, the market’s muted response surprised many observers.
NVDA kicked off Monday trading at $215.33, marking a decline from its record peak of $236.54 reached on May 14. Despite recent weakness, the stock has climbed approximately 65% over the trailing twelve months.
Fiscal first-quarter 2027 earnings, announced May 20, revealed total sales of $81.62 billion. This represents an 85.2% year-over-year increase and exceeded Wall Street’s consensus forecast of roughly $78.42 billion. Earnings per share reached $1.87, topping projections of $1.76.
The Data Center division dominated performance with $75.2 billion in revenue — a 92% jump compared to the prior-year period. Hyperscale customers and the AI cloud, industrial, and enterprise sectors each accounted for approximately half of this total.
Free cash flow for the period reached approximately $49 billion. Non-GAAP gross margin remained steady at 75%, while return on equity registered at 96.94%.
Share Repurchase Program, Dividend Increase, and Forward Outlook
The board of directors approved an $80 billion share buyback authorization and boosted the quarterly dividend from $0.01 to $0.25 per share. The dividend payment date is scheduled for June 26, with a record date of June 4. This increase extends Nvidia’s dividend growth streak to 14 consecutive years.
Second-quarter revenue guidance was established at approximately $91 billion, with a 2% margin of error. Notably, this forecast excludes data center compute revenue from China due to continuing export control complexities.
Total supply obligations, including advance inventory payments, have accumulated to $145 billion.
Product Pipeline and Financial Metrics
Blackwell has emerged as NVIDIA’s most rapidly scaling product generation to date. The company plans to launch the Vera Rubin platform during the latter half of 2026. Looking further ahead, Reuters has reported that a next-generation architecture named Feynman is targeted for 2028.
Chief Executive Jensen Huang unveiled the Vera CPU, positioning it as the industry’s first processor specifically engineered for agentic AI applications. Management views this as an entry point into an approximately $125 billion CPU market opportunity projected for 2030.
The company also revealed a collaboration with Kawasaki Heavy Industries focused on robotics systems driven by physical AI technology.
Trading at approximately 26.2x forward earnings, NVDA carries a valuation below the semiconductor sector’s median of around 34x. For comparison, Broadcom trades near 50x forward earnings. Nvidia’s PEG ratio currently sits at 0.57.
Danica Pension expanded its Nvidia position by 5% during the fourth quarter, elevating total ownership to 2.81 million shares. Nvidia now represents the fund’s largest holding at approximately 7.5% of the portfolio, with a market value of $523 million.
Institutional investors and hedge funds maintain collective ownership of 65.27% of outstanding NVDA shares. Wall Street analysts hold a consensus “Buy” recommendation with an average 12-month price objective of $303.27, suggesting roughly 40% potential appreciation from present levels.
Truist elevated its price target to $307, TD Cowen adjusted upward to $275, and Needham boosted its target to $270 following the quarterly results.
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