Nvidia reported better-than-expected Q1 results and provided optimistic guidance for the second quarter, with CEO Jensen Huang highlighting new product lines that could significantly expand the company’s revenue beyond its flagship AI chip business. Despite the positivity, the stock is down in Thursday afternoon trading.
Investing.com reports that Nvidia delivered impressive first-quarter financial results that exceeded Wall Street expectations, reporting revenue of $81.62 billion compared to analysts’ average estimate of $78.86 billion. The company’s data center segment, which has become its primary growth driver, generated $75.2 billion in revenue against expectations of $72.8 billion. Adjusted earnings per share came in at $1.87, surpassing the consensus estimate of $1.76.
Despite beating Wall Street expectations, the stock is down almost 1.4 percent as of this writing, reflecting the market’s sky high expectations for the AI giant.
For the upcoming second quarter, Nvidia provided guidance calling for revenue of $91 billion, substantially above the Street’s estimate of $86.84 billion. The company also announced significant shareholder-friendly initiatives, including an $80 billion share repurchase program and a substantial increase in its quarterly cash dividend to $0.25 per share from just $0.01.
Despite the robust financial performance, Nvidia shares showed relatively muted movement in premarket trading Thursday, suggesting investor concerns about intensifying competition in the AI chip market. Several of Nvidia’s largest customers are investing heavily in developing their own custom chips, presenting a potential long-term challenge to the company’s market dominance.
During the earnings call, CEO Jensen Huang sought to reassure investors about Nvidia’s growth prospects. He emphasized the company’s diversified customer base and highlighted a rapidly expanding segment of AI-specific cloud firms whose sales matched those of hyperscale customers during the quarter while growing at a faster rate. Huang expressed confidence that Nvidia would grow faster than its large hyperscale customers.
A major focus of Huang’s presentation was the introduction of Nvidia’s new Vera central processors, which he said opens up a $200 billion addressable market opportunity. The company projects $20 billion in Vera chip revenue by the end of the fiscal year, a figure that exists entirely outside the previously announced $1 trillion forecast for Blackwell and Rubin AI chips expected between 2025 and 2027.
“I expect (Vera) to be the second largest” sales contributor beyond the $1 trillion in Blackwell and Rubin chips, Huang said. “All of our customers are quite excited about Vera.” However, he also cautioned that “my sense is that we’ll be supply-constrained through the entire life of Vera Rubin,” referring to the combined chip platform scheduled to launch later this year.
Nvidia also disclosed $30 billion in cloud computing agreements, an increase from $27 billion in the prior quarter, which the company indicated support its research and development efforts.
Wall Street analysts responded positively to the results, with most maintaining bullish outlooks on the stock. Goldman Sachs analysts identified a clearer path for outperformance, citing expected increases in hyperscaler capital expenditure and improved capital allocation that should boost investor confidence. They noted that Nvidia is driving over 70 percent annual token cost reductions while token prices remain stable or increase.
Bank of America analysts flagged Nvidia’s diverse growth engines across both hyperscale and AI cloud enterprise segments. While these segments currently represent roughly equal proportions of business, the firm expects the AI cloud and enterprise segment to grow faster as artificial intelligence adoption broadens, noting that Nvidia maintains a near-monopoly in areas that custom chips cannot address.
Bernstein characterized the quarter as strong and relatively quiet by Nvidia standards, with powerful results that investors have come to expect. The firm highlighted continued off-the-charts demand for Blackwell chips and confidence in the $1 trillion Blackwell and Rubin trajectory extending into 2027.
Raymond James drew attention to the growth dimension added by Vera in the CPU market, noting that Nvidia expects nearly $20 billion in CPU sales this year and predicts a $200 billion total addressable market by 2030, significantly higher than AMD’s recent $120 billion prediction for the same timeframe.
Stifel raised its price target to $282 following the report, introducing fiscal year 2029 estimates while maintaining a directional bias to the upside. Macquarie noted very high demand for GPUs and highlighted that both A100 and H100 rental prices were increasing. Evercore ISI pointed out that the dividend increase and new repurchase authorization indicate possibly higher capital returns in 2026 than previously expected.
Read more at Investing.com here.
Lucas Nolan is a reporter for Breitbart News covering issues of AI, free speech, and online censorship.