According to reports from Reuters and the Associated Press on May 20, Nvidia's revenue for the first quarter of fiscal year 2027 (February to April 2026) reached $81.62 billion (approximately 122.2 trillion won), marking an 85% increase compared to the same period last year and surpassing market expectations of around $78.9 billion.
The data center segment was the primary driver of this growth, with revenue soaring 92% to $75.2 billion year-over-year. The demand for graphics processing units (GPUs), networking equipment, and server systems necessary for AI development and service operations significantly boosted sales.
Nvidia's outlook for the next quarter also exceeded market expectations. The company projected second-quarter revenue (May to July) at $91 billion, surpassing Wall Street's forecast of $86.84 billion, as reported by Reuters. Nvidia also announced a plan to buy back $80 billion of its shares.
Jensen Huang, Nvidia's CEO, emphasized the expanding demand for AI semiconductors, stating, "Building AI factories is the largest infrastructure expansion in human history, and it is progressing at an incredible pace." AI factories refer to large data centers that support AI services. He noted that the demand for GPUs and servers continues to rise as AI services evolve beyond chatbots to include more complex business applications.
Media outlets echoed this sentiment. The Associated Press noted that "demand for AI semiconductors drove Nvidia's performance improvement," while Reuters viewed Nvidia's results and outlook as key indicators of global investment trends in AI data centers. The Guardian highlighted the surge in data center revenue, pointing out that the expansion of AI infrastructure is ongoing.
However, the stock market reaction was muted. Nvidia's shares rose 1.3% during regular trading but fell 1.26% in after-hours trading following the earnings announcement. Analysts suggest that the already high growth expectations may have been priced into the stock. Reuters reported that "investor interest is shifting from short-term results to the sustainability of AI investments." The key variables will be whether AI investments continue over the next one to two years and how much competition will grow in the inference semiconductor market necessary for AI service operations.
China also remains a significant variable. With U.S. export restrictions and China's import bans intersecting, the timeline for revenue recovery remains uncertain. Nvidia did not factor in a recovery of data center sales in China for its next quarter outlook. Huang stated regarding the Chinese market, "I believe the market will open over time," but the H200 chips intended for sale in China have yet to receive approval from Chinese authorities. In a CNBC interview, he expressed, "I have no expectations regarding H200 sales," adding, "We have effectively ceded that market to them (Huawei)."
From a long-term perspective, the development of in-house chips by major tech companies poses another variable. Companies like Alphabet, Amazon, and Microsoft are developing their own AI chips while still relying on Nvidia's semiconductors. AMD and Intel are also targeting the inference semiconductor market, indicating ongoing challenges to Nvidia's long-term dominance.
* This article has been translated by AI.
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