Nvidia (NVDA) Q1 2027 Earnings Report: Live Updates

In the years before the generative AI boom, Nvidia was primarily known for its gaming chips. In fiscal year 2020, more than half of its revenue came from gaming, and just 27% from data centers.

To this day, Nvidia is mostly a data center company. Last year, this business accounted for 90% of its revenue, and there appears to be no sign of slowing down.

Nvidia’s Grace Blackwell rack-scale systems have long been sold out, and Wall Street is now eyeing increased shipments of the upcoming system Vera Rubin.

Meanwhile, gaming currently represents less than 8% of Nvidia’s business. And as CNBC reported last month, gamers are feeling betrayed by Nvidia’s relentless focus on data center clients, a reality that has become even more apparent recently as a global memory shortage has led Nvidia to prioritize Blackwell and Rubin over GeForce gaming GPUs.

—Katie Tarasoff

One area of ​​great uncertainty is China, particularly regarding Nvidia’s older Hopper GPU known as H200. Huang was a last-minute addition to President Donald Trump’s China summit last week, but the visit did little to clarify whether the H200 would be allowed to be sold in the country.

Huang said at NVIDIA’s GTC conference in March that NVIDIA has received orders for the H200 from China.

“We are restarting manufacturing,” Huang told reporters at an event in San Jose, California.

Reuters reported last week that several Chinese companies, including Alibaba, Tencent, ByteDance and Jingtocom, received approval from the U.S. Department of Commerce to purchase H200.

But a U.S. trade representative said chip export controls were not discussed in last week’s talks with China, suggesting a major breakthrough in sales in the second half of 2000 may not be forthcoming.

China once accounted for at least a fifth of Nvidia’s data center revenue, but the company has been locked out of China since the Trump administration told it in April that it needed a license to export chips to the country and a handful of other countries.

—Katie Tarasoff

Cerebras Systems’ monster Nasdaq debut last week was a clear signal that the tech giant is desperate for an alternative to Nvidia’s expensive (and sold-out) GPUs. The company’s market capitalization rose to nearly $100 billion on the first day of trading.

Cerebras makes another type of chip known as a custom ASIC (application-specific integrated circuit). This is becoming popular as agent AI shifts computing needs to inference. GPUs are great for the parallel computations needed to train large models, but inference can also be done on less powerful chips programmed for more specific tasks.

In-house ASICs are now manufactured by Google, Amazon, Meta, Microsoft, and others, making it an increasingly crowded field. Cerebras operates dinner plate-sized chips within its own data centers and competes with cloud providers Google, Microsoft, Oracle and CoreWeave.

Nvida also manufactures custom ASICs in-house after spending $20 billion to acquire Groq’s technology in December and announcing a custom Groq language processing unit at GTC in March.

—Katie Tarasoff

Nvidia’s stock price has risen about 20% since the beginning of the year, lagging many of its peers but still enough to support the world’s largest market capitalization.

Nvidia became the first $5 trillion company in October and inched closer to the $6 trillion mark last week, but after a brief setback, that number now sits at $5.5 trillion.

The company’s record-breaking results come as semiconductor companies other than Nvidia hit historic highs. Intel had its best month ever in April as agent AI sparked a massive central processing unit renaissance. Meanwhile, memory makers such as Micron have seen their stock prices soar amid shortages of key types of chips needed to support AI.

Alphabet briefly overtook Nvidia as the world’s most valuable company in after-hours trading earlier this month, but so far that appears to be only temporary. Google’s parent company is currently worth about $4.6 trillion.

—Katie Tarasoff

Nvidia has largely benefited from AI through its graphics processing units (GPUs), which are used to train and run powerful underlying models.

Nvidia’s fiscal first quarter data center revenue is expected to increase 87% year-over-year to $73.1 billion, marking an even faster expansion than last quarter’s 75% year-over-year increase and year-over-year growth rate of 73%.

This sustained growth reflects explosive capital spending by hyperscalers sourcing GPUs for data center computing infrastructure supporting AI initiatives.

On the same day last month alphabet, Amazon, meta and microsoft Both report quarterly results and provide investors with an update on this year’s capital spending forecasts. Financial companies like Evercore and Bank of America predict the group will spend more than $1 trillion in AI-related capital spending in 2027, ultimately benefiting Nvidia.

“We are considering whether the company is expanding its customer base as it remains a significant risk,” Gabelli Funds portfolio manager John Belton said in an email Tuesday, adding that the five names account for about half of Nvidia’s business.

“We have questions about how sustained the growth in that line of business is, whether we’re expanding our customer base, expanding our product set, etc.,” Belton said.