Nvidia's quarterly earnings are coming! Strong performance is expected, and guidance may set the tone for the future market

Nvidia will release its earnings report after the market closes on May 20th, Eastern Time. For fiscal year 2027, Q1 revenue is projected to reach $79.17 billion, a 79.67% increase year-over-year; expected earnings per share are $1.75, a 130.26% increase YoY. (The above data is based on US-GAAP accounting standards)

1. Brief review of FY2026 Q4 earnings report

In FY2026 Q4, Nvidia's revenue was $68.1 billion, up 73% year-over-year, setting a record high; GAAP net profit was $42.96 billion, up 94%; gross margin was 75%, an increase of 2 percentage points from the previous quarter.

2. Outlook for FY2027 Q1 earnings report

Data center business remains the biggest focus of this earnings report.

Core driver: Blackwell drives unexpected growth

Thanks to the continued high demand for AI computing power exceeding supply, Nvidia as the core growth engine will continue to benefit. Citibank expects Q1 revenue to hit $80 billion, mainly driven by Blackwell (B300) chip capacity ramp-up exceeding expectations. As the current revenue pillar, Blackwell's market penetration (Citibank estimates over 70% of high-end GPU shipments in 2026) and actual revenue contribution will directly determine this year's growth trajectory.

Future bets: Vera Rubin sets the trillion-dollar outlook

In addition to the current, the market is closely watching the next-generation platform Vera Rubin to assess potential beyond 2027. Reports indicate that the platform has finalized mass production plans, with trial production scheduled for June and delivery to top cloud providers in July. During the earnings call, management’s timeline for Rubin’s mass production and order visibility will be crucial. CEO Jensen Huang previously predicted that the combined revenue opportunity for Blackwell and Rubin could exceed $1 trillion (doubling from a year earlier). If this aggressive target is confirmed or raised in this earnings report, it will be key to boosting long-term valuation.

Risks and hedging: Memory bottlenecks and supply chain resilience

Despite optimistic prospects, supply constraints remain a major variable. Morgan Stanley warns that shortages of DRAM and HBM4 memory could restrict shipments. However, Nvidia appears to have built a defense: the company has signed about $95 billion in procurement commitments and holds approximately $21 billion in inventory, enough to cover most demand over the next 18 months. Investors will watch how Jensen Huang balances the short-term challenges of memory shortages with the long-term resilience of supply chain reserves.

Networking business: From supporting role to key growth driver. Nvidia recently announced a $2 billion investment in Marvell and will integrate NVLink technology into Marvell’s networking products. This move aims to lock in the high-speed interconnect standards for AI data centers, further strengthening its efficiency advantage in large-scale cluster deployments.

Gaming business: Despite market focus on AI, gaming remains a key cash flow foundation. Driven by the rollout of RTX 50 series graphics cards and a rebound in PC demand, the business remains resilient; but due to capacity prioritization for data centers, the CFO has previously warned that supply will remain tight. Given the massive scale difference, gaming revenue is expected to still account for a single-digit percentage this quarter, with limited impact on overall growth.

Automotive and professional visualization: Currently still in the “high growth, small scale” stage: automotive business is accelerating through collaborations with automakers on autonomous driving, but the absolute scale remains small; professional visualization is slowly ramping up with industrial design scenarios (like Omniverse digital twins), belonging to niche incremental markets, with future AI workstation penetration bringing marginal changes to watch.

Profit fundamentals: Maintaining gross margin amid Blackwell volume expansion

Gross margin is a key indicator of pricing power. The company guides GAAP/Non-GAAP gross margins at 74.9%/75.0%, roughly flat from the previous quarter’s 75%. The market is closely watching whether large-scale Blackwell volume will pressure prices—holding at 75% indicates strong premium capability, while falling below could lead to valuation reassessment. Morgan Stanley warns that with Rubin architecture’s mass production and rising supply chain costs, FY2028 gross margin could be pressured to around 72.7%, but short-term large procurement commitments and inventory buffers still provide profit cushions.

Forward-looking focus: Guidance strength versus “good news already priced in”

Market attention has shifted beyond Q1’s strong performance to the guidance: whether this quarter’s revenue beat, and next quarter’s guidance approaching or surpassing $90 billion, and whether data center growth can remain robust, are key to judging whether cloud providers’ AI Capex has peaked. If guidance is strong enough, it will reinforce the “AI infrastructure has no ceiling” narrative; if only modestly revised upward, short-term funds may take profits citing “good news already priced in.”

AI chip landscape undergoing restructuring

Cloud giants like Amazon and Google are increasingly developing their own ASIC chips, and Cerebras, which just completed the largest IPO of 2026 (raising $5.55 billion, with a first-day surge), is also gaining momentum. Although the CUDA ecosystem has created high barriers, the current situation where Nvidia captures most profits is prompting major companies to accelerate multi-supplier strategies, risking market share dilution and long-term pricing power weakening.