NVIDIA's Q1 performance is stable, with the Vera CPU driving future growth

Author: SoSoValue Research

NVIDIA released its Q1 results for fiscal year 2027, with Q1 performance expected to align closely with the optimistic expectations of buyers for Q2 guidance, although the buyback was slightly below investor expectations. After-hours stock price fell slightly by 1.3%, as the market lacks short-term excitement, but the medium to long-term growth logic remains clear.

Q1 Performance Highlights: Steady and in Line with Optimistic Expectations

NVIDIA's Q1 revenue was $81.62 billion, a year-on-year increase of 85% and a quarter-on-quarter increase of 20%, basically in line with the optimistic expectations of buyers in the $81-82 billion range, exceeding Bloomberg's consensus expectation of $78.91 billion. Adjusted gross margin was 75%, up 14.2 percentage points year-on-year, with Bloomberg's expectation at 75.1%, meeting expectations. Adjusted net profit was $45.55 billion, a year-on-year increase of 139%, with adjusted EPS at $1.87, higher than Bloomberg's expectation of $1.77.

This quarter, NVIDIA restructured its revenue categories into data center and edge computing to better showcase the AI-driven business structure, with orders from hyperscale customers in the data center being the core growth driver:

• Data center revenue was $75.2 billion, up 92% year-on-year and 21% quarter-on-quarter, exceeding Bloomberg's expectation of $73.33 billion.
• Hyperscale revenue (including public cloud and large internet companies) was $37.9 billion, a year-on-year increase of 115%, accounting for 50.4% of data center revenue, 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, a year-on-year increase of 74%, accounting for 49.6%.
• Edge computing (Agent & physical AI, including PCs, gaming consoles, workstations, AI-RAN base stations, robots, and automobiles) revenue was $6.4 billion, up 29% year-on-year and 10% quarter-on-quarter.

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. The Vera CPU is designed for Agentic AI and can be sold both as a supporting device for the Rubin GPU and independently as a CPU, storage node, and security node. Total CPU revenue is expected to approach $20 billion this year, with mass production and shipping planned to start in the third quarter; it will become a new increment for NVIDIA's business.

Management maintains the revenue target of $1 trillion for Blackwell + Rubin from 2025 to 2027, with no upward adjustment yet; the Rubin platform will begin mass production in the second half of the year, starting in Q3, ramping up in Q4, with significant increases in shipments expected in Q1 next year.

Additionally, revenue from China continues to be excluded from guidance, and the U.S. government has approved the shipment of H200 to Chinese customers, but it is uncertain whether China will allow imports.

Q2 Performance Guidance Basically Meets Expectations

• Q2 revenue guidance is $91 billion (±2%, not considering contributions from China), with optimistic expectations from buyers at $91 billion, basically in line with expectations.
• Adjusted gross margin is 75% (±0.5%), basically in line with expectations;

However, the buyback is slightly below expectations: The company has authorized an additional $80 billion for buybacks, and the quarterly dividend has been raised to $0.25 per share (previously $0.01), slightly below some investors' expectations for over $100 billion in new buybacks.