Review|NVDA FY1Q27: CPU Injects Revenue Momentum; Upward Revision of Revenue and Earnings Guidance

NVDA's FY1Q27 revenue came in at $81.6 billion, slightly higher than FundaAI's estimate of $80.6 billion and also beating the buy-side market expectation of $81.0 billion; gross margin was 75%, slightly lower than FundaAI's estimate of 75.2% and in line with the buy-side market expectation of 75%; diluted EPS was $1.87, matching FundaAI's estimate of $1.87 and exceeding the buy-side market expectation of $1.84.

For the FY2Q27 guidance, the revenue midpoint is estimated at $91.0 billion, compared to FundaAI's preview estimate of $91.2 billion and the buy-side market expectation of $89.7 billion; the gross margin guidance midpoint is 75%, slightly lower than FundaAI's estimate of 75.2% but higher than the buy-side market expectation of 74.8%.

This quarter, NVDA returned a record $20 billion to shareholders. The quarterly dividend was substantially raised from $0.01 per share to $0.25 per share; furthermore, the Board of Directors announced a brand-new $80 billion share repurchase authorization (which is in addition to the $39 billion remaining from the existing program). The company plans to return approximately 50% of its free cash flow to shareholders this year. 

Datacenter CPU

NVDA expects its CPU revenue this year to approach $20 billion, explicitly clarifying that this figure refers to sales revenue from standalone CPUs. NVDA stated that the Vera CPU opens up a brand-new $200 billion TAM for NVIDIA (compared to AMD's early-May forecast of a >$120 billion TAM, NVDA clearly anticipates a larger CPU market).

NVDA broke down four core sales scenarios, including: the Vera Rubin system kit paired with Rubin GPUs, standalone Vera CPU sales, integration into storage software stacks paired with CX9 NICs, and security isolation and Confidential Computing paired with CX9 NICs.