Nvidia Earnings - May 2026
NVIDIA Corporation
$81.6B revenue, $80B buyback, 25x dividend hike.
A record-shattering print, an $80B buyback authorization, and a Q2 guide of $91 billion that assumes zero China data center compute revenue.
NVIDIA (NASDAQ: NVDA) reported first-quarter fiscal 2027 results (quarter ended April 26, 2026) on May 20, 2026, posting record revenue of $81.6 billion (up 85% YoY) and non-GAAP diluted EPS of $1.87, both cleanly above the consensus of $80.5B in revenue and $1.77 in non-GAAP EPS. Data Center revenue of $75.2 billion (up 92% YoY) accounted for 92% of total revenue, with networking revenue of $14.8B nearly tripling YoY on the strength of NVLink, InfiniBand and Spectrum-X Ethernet attach to the Blackwell platform.
NVIDIA closed May 20 ahead of the print and rose roughly 1.4% in extended trading. As of May 21, the stock traded in a $216.25 to $226.94 range and the market capitalization stands near $5.5 trillion. Four items framed the print: (1) Q2 FY27 revenue guide of $91.0B, plus or minus 2%, materially above the Street's $86B estimate and explicitly assuming zero data center compute revenue from China; (2) GAAP gross margin of 74.9% with non-GAAP at 75.0%, expanding more than 14 points YoY; (3) the Board authorized an additional $80B in share repurchases and raised the quarterly dividend from $0.01 to $0.25 per share, a 25x increase; and (4) NVIDIA introduced a new reporting framework, splitting the business into Data Center and Edge Computing.
The bear case heading into this print was that hyperscaler capex digestion would slow growth and that China headwinds would pressure margins. Instead, NVIDIA grew revenue 20% sequentially, raised Q2 guidance by roughly $5 billion above consensus, and removed China from the model entirely. The Vera Rubin platform, NVLink Fusion partnership with Marvell, and Dynamo 1.0 software stack signal a multi-year roadmap of compute, networking and software monetization. With a consensus Strong Buy and a 12-month average price target near $282, the asymmetry remains skewed to the upside, but the bar for further multiple expansion is now considerably higher.
Headline KPIs at a Glance
Fifth consecutive record quarter, +20% sequential.
Q1 FY27 revenue of $81.6 billion grew 85% YoY and 20% sequentially, the company's fifth consecutive quarter of record revenue and a meaningful acceleration from the prior quarter's $68.1 billion. The print exceeded the high end of management's own Q1 FY27 outlook of $80.5 billion and beat consensus by roughly $1.1 billion. Foreign exchange impact was negligible.
How the print beat consensus
GAAP net income of $58.3 billion (up 211% YoY) included approximately $15.9 billion of net gains from equity securities, primarily reflecting mark-to-market on non-marketable investments. Non-GAAP net income of $45.5 billion (up 139% YoY) excludes those gains and is the cleaner read on operating performance. Operating cash flow of $50.3 billion and free cash flow of $48.6 billion were both quarterly records. NVIDIA returned approximately $20 billion to shareholders in the quarter through buybacks and dividends.
Data Center 92% of revenue, networking up 199%.
Data Center. Revenue of $75.2 billion (up 92% YoY and 21% sequentially) was driven by the ramp of Blackwell 300 (B300) Ultra and continued networking momentum. Compute revenue grew to $60.4 billion (up 77% YoY) and Networking grew to $14.8 billion (up 199% YoY and 35% sequentially), the clearest sign yet that NVIDIA's networking franchise (InfiniBand, Spectrum-X Ethernet, NVLink) is becoming a meaningful standalone value driver.
Edge Computing. Revenue of $6.4 billion (up 29% YoY and 10% sequentially) included the new DLSS 4.5, Drive Hyperion expansion (Hyundai, Kia, BYD, Geely, Isuzu, Nissan), Cosmos and Isaac robotics models, and partnerships with T-Mobile and Nokia on AI-RAN. The segment is small relative to Data Center but the growth profile is improving as automotive design wins and on-device AI accelerate.
Strategic announcements. NVIDIA introduced the Vera Rubin platform (including the Vera CPU and BlueField-4 STX), NVLink Fusion with Marvell, Dynamo 1.0 open-source inference software, the Nemotron Coalition for open AI models, and multi-year optics partnerships with Coherent, Corning and Lumentum.
GAAP gross margin of 74.9% and non-GAAP gross margin of 75.0% expanded more than 14 percentage points YoY and were essentially flat sequentially. The structurally higher gross margin reflects the absence of the $4.5B H20 inventory charge taken in Q1 FY26, an improved Blackwell mix, and disciplined operating leverage even as the company ramps capacity. Beginning Q1 FY27, NVIDIA's non-GAAP measures no longer exclude stock-based compensation expense; historical periods have been restated.
Q2 guide $5B above consensus, excludes China DC.
| Metric | Q2 FY2027 Guidance | Change vs. Prior |
|---|---|---|
| Q2 FY27 Revenue | $91.0B, +/- 2% | Above $86B Street; excludes China DC compute |
| GAAP / Non-GAAP Gross Margin | 74.9% / 75.0%, +/- 50 bps | In line with Q1; structurally elevated |
| GAAP / Non-GAAP Op Expense | ~$8.5B / ~$8.3B | Higher R&D investment ongoing |
| FY27 Tax Rate | 16.0% to 18.0% | Range unchanged |
| Capital Returns | +$80B buyback authorization | Plus dividend raised 25x to $0.25 |
| Reporting Structure | Data Center / Edge split | New ACIE sub-segment introduced |
Surprises and their stock-price implications
- Q2 FY27 guide of $91 billion. About $5B above Street consensus and explicitly assumes zero China data center compute revenue, removing the largest perceived overhang on the model and implying further upside if export rules ease.
- Data Center networking up 199%. Networking revenue nearly tripled YoY and grew 35% sequentially. Spectrum-X Ethernet and NVLink attach are converting NVIDIA's networking business into a multi-billion-dollar growth engine.
- $80B buyback and 25x dividend hike. Signals confidence in the durability of free cash flow and provides a meaningful technical support level for the stock.
- Gross margin held at 75%. Despite ramp-driven costs and a richer networking mix, gross margin came in essentially flat sequentially. Bears expected dilution from Blackwell ramp; that did not happen.
- New reporting structure. Data Center / Edge Computing split (with Hyperscale and ACIE sub-segments) gives investors a cleaner view by customer type.
- Vera Rubin and NVLink Fusion announcements. Marvell partnership extends NVIDIA's networking footprint and the Vera CPU positions the company beyond GPUs and into the broader compute architecture.
- Equity-securities gain of $15.9B. A large mark-to-market on non-marketable investments inflated GAAP earnings. The cleaner number is $45.5B non-GAAP net income.
Strong Buy consensus, ~26% implied upside.
NVDA shares closed May 20 ahead of the after-the-bell release and rose approximately 1.4% in extended trading to about $223.63. On May 21, the stock traded between $216.25 and $226.94, with the modest intraday volatility reflecting balanced reactions across the dual themes of the print: the guide was clearly above consensus, while the explicit assumption of zero China data center compute revenue underscored ongoing export-control uncertainty. Year to date the stock has outperformed the broader Nasdaq, and the market capitalization stands at approximately $5.5 trillion.
Analyst recalibration
Analyst sentiment going into the print was unusually one-sided. TipRanks shows a consensus Strong Buy based on 40 Buy ratings, 1 Hold and 1 Sell. According to S&P Global, 61 analysts cover the name. Average price targets cluster around $272 to $286, with a high target of $380 (Bank of America) and a low of $220.
China export, concentration, custom silicon.
Primary risks
- China export restrictions. Q2 guidance assumes zero China DC compute revenue. Easing of restrictions would represent incremental upside, but further tightening could affect Edge Computing and ACIE.
- Customer concentration. Hyperscalers represent the majority of Data Center revenue. A capex digestion phase among the top four buyers would directly compress growth even if total AI demand remains intact.
- Custom silicon competition. Google TPU, Amazon Trainium, Microsoft Maia, AMD MI400 and Meta MTIA all represent competitive pressure. NVLink Fusion is partially designed to keep these systems within NVIDIA's networking footprint.
- Gross margin sustainability. 75% gross margin is structurally high. Blackwell Ultra and Rubin transitions, networking mix and any pricing concessions could compress margin by 100 to 200 basis points.
- Valuation. The stock trades at roughly 28x forward non-GAAP EPS. While justified by growth, multiple expansion from here is harder; further upside depends on earnings revisions.
Catalysts to watch
- Blackwell Ultra (B300) volume ramp in second half of CY2026.
- Q2 FY27 print (late August 2026) and Q3 guidance.
- Sovereign AI deal announcements (EU, UAE, India, Japan).
- NVLink Fusion partner additions beyond Marvell.
- Easing of U.S. China export restrictions.
- Vera Rubin platform sampling and first systems revenue.
NVIDIA delivered the cleanest large-cap print of the cycle: record revenue and free cash flow, stable 75% gross margin, a Q2 guide $5 billion above consensus that assumes zero China revenue, an $80 billion buyback authorization, and a 25x dividend hike. With Wall Street consensus at Strong Buy and a 12-month average price target near $282 (about 26% upside), we view NVDA as a core long-term holding for AI infrastructure exposure. The bar to outperform is now higher, but the platform, software and networking attach mean the company is far less GPU-only than the bear case requires.
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