Author: SoSoValue Research
Nvidia released its Q1 2027 fiscal year results, with Q1 performance and Q2 guidance largely in line with optimistic buyer expectations, but share buybacks were slightly below investor expectations. The stock price fell slightly by 1.3% in after-hours trading, indicating a lack of short-term market excitement, but the medium- to long-term growth logic remains clear.
Q1 Performance Highlights: Solid and in line with optimistic expectations
Nvidia's Q1 revenue reached $81.62 billion, up 85% year-over-year and 20% sequentially, largely in line with optimistic buyer expectations of $81-82 billion, exceeding Bloomberg's consensus estimate of $78.91 billion. Adjusted gross margin was 75%, up 14.2 percentage points year-over-year, in line with Bloomberg's expectation of 75.1%. Adjusted net income was $45.55 billion, up 139% year-over-year, with adjusted EPS of $1.87, exceeding Bloomberg's estimate of $1.77.
This quarter, Nvidia restructured its revenue into two segments: data center and edge computing, to better reflect its AI-driven business structure. In the data center segment, orders from hyperscale customers are the core growth driver.
● Data center revenue reached $75.2 billion, up 92% year-over-year and 21% quarter-over-quarter, exceeding Bloomberg's forecast of $73.33 billion.
Hyperscale (serving hyperscale customers, including public cloud and large internet companies) generated $37.9 billion in revenue, a year-over-year increase of 115%, accounting for 50.4% of data center revenue. This was the fastest-growing segment and the most important driver of Nvidia's revenue.
ACIE (AI Cloud, Industry, and Enterprise Applications) revenue reached $37.4 billion, a year-on-year increase of 74%, accounting for 49.6% of total revenue.
● Edge computing (Agent & physical AI, including PCs, game consoles, workstations, AI-RAN base stations, robots, and automobiles) revenue reached $6.4 billion, up 29% year-over-year and 10% quarter-over-quarter.
Earnings Presentation: Vera CPU is the most core incremental information
The conference call revealed that Vera CPUs open up a new $200 billion market for Nvidia. Designed for Agentic AI, Vera CPUs can be sold as a companion device to Rubin GPUs, or independently as CPUs, storage nodes, and security nodes. Total CPU revenue is projected to approach $20 billion this year, with mass production and shipping planned to begin in the third quarter; becoming a new growth driver for Nvidia's business.
Management maintains its guidance of $1 trillion in revenue from Blackwell + Rubin for 2025-2027, without raising it; mass production of the Rubin platform will begin in the second half of the year, starting in Q3, ramping up in Q4, and shipments will increase significantly in Q1 of next year.
In addition, revenue from China continues to be excluded from the guidance. The US government has approved H200 shipments to Chinese customers, but it is uncertain whether China will allow imports.
Q2 earnings guidance was largely in line with expectations.
● Q2 revenue guidance is $91 billion (±2%, excluding revenue contribution from China), which is in line with the optimistic buyer expectation of $91 billion.
● The adjusted gross margin was 75% (±0.5%), which is basically in line with expectations;
However, the share buyback was slightly below expectations: the company added $80 billion in buyback authorization and increased the quarterly dividend to $0.25 per share (from $0.01 previously), slightly below some investors' expectations of more than $100 billion in new buybacks.
