Key Takeaways
- Nvidia surpassed Q1 earnings expectations with adjusted EPS of $1.87 versus the $1.77 consensus, while revenue reached $81.6B against a forecast of $79.19B.
- The company’s Q2 revenue projection of $91B significantly exceeded analyst estimates of $87.36B.
- An $80B stock buyback initiative was unveiled alongside a dramatic dividend increase to 25 cents per share from just 1 cent.
- Jensen Huang, CEO, highlighted the newly launched “Vera” CPU as a gateway to a $200B addressable market, with expectations for $20B in Vera-related sales by fiscal year-end.
- NVDA shares declined approximately 1.6% in after-hours sessions as market participants assessed intensifying competition from proprietary chip developments.
Nvidia’s shares settled at $223.47 during regular Wednesday trading hours ahead of its post-market earnings announcement. The stock experienced a modest 1.6% decline in extended-hours trading despite delivering impressive financial results across multiple metrics.
The chipmaker reported fiscal first-quarter revenue totaling $81.62B, surpassing the analyst projection of $78.86B. On an adjusted basis, earnings per share registered at $1.87, exceeding the consensus target of $1.77 by a notable $0.10 margin.
The data center segment generated $75.2B in quarterly revenue, outperforming the $72.8B expectation. This division continues to serve as Nvidia’s primary growth driver.
Nvidia Earnings Smash Expectations 🚀
Nvidia $NVDA delivered another huge AI-driven quarter, with revenue, EPS, data center sales and guidance all coming in ahead of Wall Street forecasts ⚡ pic.twitter.com/BjjN9d80SK
— Wall St Alpha (@WallStAlphaPro) May 21, 2026
For the second quarter, Nvidia issued guidance of $91B — with a 2% variance buffer — substantially exceeding Wall Street’s $87.36B projection. The upper boundary of this range suggests potential revenue approaching $92.8B.
Additionally, the company revealed an $80B share repurchase authorization and increased its quarterly cash distribution from 1 cent to 25 cents per share, representing a staggering 2,400% dividend enhancement.
Vera Chip Represents Strategic Expansion
During the earnings conference call, CEO Jensen Huang emphasized Nvidia’s “Vera” central processing unit, positioning it as entry into a fresh $200B market opportunity. He indicated that Nvidia anticipates generating $20B in Vera-related revenue before the current fiscal year concludes.
Importantly, this $20B projection stands separate from Nvidia’s previously disclosed $1 trillion revenue estimate covering Blackwell and Rubin AI processors through 2027. Huang projected Vera would emerge as the company’s second-largest revenue stream beyond that trillion-dollar benchmark.
“All of our customers are quite excited about Vera,” Huang stated during the conference call.
However, he acknowledged a significant limitation. “My sense is that we’ll be supply-constrained through the entire life of Vera Rubin,” he noted, referencing the integrated platform scheduled for release later this year.
To address anticipated supply chain challenges, Nvidia’s supply obligations climbed to $119B in Q1, representing an increase from the previous quarter’s $95.2B.
Rising Competitive Pressure
The after-hours stock retreat mirrors escalating investor concerns: Nvidia’s largest clients are developing proprietary chip solutions.
Alphabet, Amazon, and Microsoft are projected to allocate more than $700B toward AI infrastructure investments in 2025, up from approximately $400B in 2024. A substantial portion of these expenditures is directed toward custom semiconductor designs intended to diminish dependency on Nvidia products.
Intel and AMD are simultaneously advancing into the inference chip sector, which is gaining strategic importance as artificial intelligence workloads transition from model training to operational deployment.
Nvidia has remained proactive in response. This past March, the company introduced a new CPU and AI system incorporating technology from Groq, the inference-specialized chip startup.
Huang highlighted an emerging sub-category within the data center business — AI-dedicated cloud providers — where revenue volumes approximately matched those from major cloud platforms while demonstrating superior quarter-over-quarter growth rates. “We should be growing faster than hyperscale capex,” Huang emphasized.
According to InvestingPro data, Nvidia has received 34 upward EPS revisions against only one downward revision over the past 90 days, with the platform rating its financial condition as “excellent performance.”
The stock has appreciated 17.73% during the previous three-month period and 69.55% over the trailing twelve months.
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