NVIDIA Q1 performance remains steady, Vera CPU drives future growth

Author: SoSoValue Research

NVIDIA releases Q1 FY2027 results; Q1 performance roughly aligns with bullish expectations for Q2 guidance, but buybacks are slightly below investor expectations. After-hours, the stock price dipped slightly by 1.3%, with the market lacking short-term excitement, but the medium- to long-term growth logic remains clear.

Q1 Highlights: Steady and in line with optimistic expectations

NVIDIA's Q1 revenue reached $81.62 billion, up 85% year-over-year, and up 20% quarter-over-quarter, basically meeting bullish expectations in the $81-82 billion range, higher than Bloomberg consensus 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 profit was $45.55 billion, up 139% year-over-year, with adjusted EPS of $1.87, surpassing Bloomberg's forecast of $1.77.

This quarter, NVIDIA restructured its revenue segments into Data Center and Edge Computing to better showcase the AI-driven business structure, with ultra-large customer orders in the data center being the core growth driver:

● Data Center revenue of $75.2 billion, up 92% year-over-year and 21% quarter-over-quarter, exceeding Bloomberg's expectation of $73.33 billion.

undefinedHyperscale (large-scale customers, including public clouds and major internet companies) revenue of $37.9 billion, up 115% year-over-year, accounting for 50.4% of data center revenue, the fastest growth, and the most important revenue driver for NVIDIA.

undefinedACIE (AI cloud, industry, and enterprise applications) revenue of $37.4 billion, up 74% year-over-year, accounting for 49.6%.

● Edge Computing (Agent & Physical AI, including PCs, gaming consoles, workstations, AI-RAN base stations, robots, and automobiles) revenue of $6.4 billion, up 29% year-over-year and 10% quarter-over-quarter.

Earnings Call: Vera CPU is the most critical incremental information

During the call, it was disclosed that Vera CPU opens a new $200 billion market for NVIDIA. Vera CPU is designed for Agentic AI, and can be sold as a supporting device for Rubin GPUs or independently as CPUs, storage nodes, and security nodes. The total CPU revenue is expected to approach $20 billion this year, with mass production starting in Q3; it will become a new growth point for NVIDIA's business.

Management maintained the revenue target of $1 trillion for Blackwell + Rubin from 2025 to 2027, without any upward revision for now; Rubin platform mass production begins in the second half of the year, starting in Q3, ramping up in Q4, with significant shipment increases expected in Q1 next year.

Additionally, Chinese revenue continues to be excluded from guidance. The U.S. government has approved H200 shipments to Chinese customers, but it is uncertain whether China will permit imports.

Q2 Guidance Basically Meets Expectations

● Q2 revenue guidance is $91 billion (±2%, excluding China revenue contribution), with bullish expectations at $91 billion, basically in line with expectations.

● Adjusted gross margin of 75% (±0.5%), roughly in line with expectations;

However, buybacks are slightly below expectations: the company announced an additional $80 billion buyback authorization, and quarterly dividends increased to $0.25 per share (up from $0.01), slightly below some investors' expectations of over $100 billion in new buybacks.