NVIDIA Profit Soars to $58bn in Q1 on AI Demand Boom
With net income of $58.3 billion, Nvidia doubled its earnings in Q1 2027 from the equivalent period in its financial year 2026. Its adjusted earnings per share (EPS) rose 100% year on year (y/y) to $1.87, comfortably surpassing Bloomberg’s $1.77 estimate.
Revenue was a record $81.62 billion, up by 85% y/y, ahead of market expectations of $79.19, driven by continued strength in AI demand and Blackwell ramp-up.
Data Centre revenue increased 92% y/y to $75.2 billion, beating estimates of $73.48 billion, mainly driven by the ramp-up of Blackwell 300 systems.
Hyperscale demand was 115% up y/y, while AI Clouds, Industrial, & Enterprise surged 74%. No shipments of Data Centre Hopper products to China occurred during the quarter, compared with $4.6 billion in 1Q26.
Edge Computing (incl. Graphics) revenue was $6.4 billion (+29% y/y, +10% q/q), supported by strong workstation (Blackwell) demand, partly offset by weaker consumer personal computing (PC) demand.
Compute & Networking grew 88% to $74.6 billion (~91% of group revenue), while Graphics grew 58%. The gross margin expanded 14.2 percentage points (ppts) y/y (-0.1 ppts q/q) to 75%, in line with guidance, supported by a favourable mix and the absence of prior-year inventory charges.
Operating income increased 21% q/q and 147% y/y to $53.8 billion. Operating expenses rose 12% q/q and 49% y/y to $7.45 billion, driven by higher compensation, infrastructure, and engineering development costs.
Cash flow from operations was $50.3 billion, up from $36.2 billion in 4Q26 and $27.4 billion a year ago. Cash and marketable securities stood at $50.3 billion (4Q26: $43.2 billion).
During the quarter, shareholder returns totalled approximately $20 billion during the quarter (buybacks and dividends). The company also increased its quarterly dividend to $0.25 per share (1Q26: $0.01) and expanded its buyback authorisation by $80 billion.
NVIDIA’s 2Q27 outlook guides revenue to $91 billion ±2 %, with no China Data Centre compute revenue assumed. The adjusted gross margin is expected to be 75% plus or minus 50 basis points (bps), while adjusted operating expenses are expected to be $8.3 billion.
Strong beats across revenue and profit metrics were driven by Data Centre growth, particularly the rapid adoption of Blackwell-based compute and networking platforms.
The company is benefiting from a dual-demand cycle: ongoing migration from Central Processing Units (CPUs) to Graphics Processing Units (GPUs) for traditional workloads, and the explosive growth of AI-native use cases.
Outside of Data Center, underlying trends are more mixed. Edge Computing delivered solid growth, supported by workstation demand tied to AI development workloads; however, this was partially offset by softer consumer PC dynamics, reflecting ongoing cyclical pressures (heightened memory and system prices) in legacy end-markets.
Profitability remains very strong, supported by scale, mix shift toward high-margin Data Center products, and operating leverage, despite elevated investment in R&D and infrastructure.
Operationally, supply constraints remain a notable limitation. While NVIDIA has significantly increased supply commitments to $145 billion, management acknowledged it is not immune to constraints, suggesting that demand may continue to outstrip supply in the near term and potentially cap realised revenue.
Nevertheless, the near-term outlook remains very strong with 2Q27 guidance mostly ahead of market expectations. The stock is trading at a forward PE of 23.6 times, a notable discount to its five-year range, suggesting it offers value at current levels.
Despite its size, the medium-term growth prospects are still very encouraging for this business. The strength of NVIDIA’s ecosystem remains a critical differentiator. Its full-stack model spanning chips, networking, and software (CUDA), creates significant switching costs and enables tight co-design across the stack.
This integrated approach not only enhances performance and cost efficiency but also reinforces customer lock-in, sustaining long-term competitive advantages. Global Equities Rally as US, Iran Keep Peace Talks Open
