NVIDIA Q1 earnings: From $80 billion buyback plan to 85% revenue growth; top takeaways

With major support from the company’s data centre, data centre networking, and artificial intelligence (AI) expansions, Nvidia posted overall record revenues for the first quarter as the firm now targets further technological advancements to fuel growth.

Nvidia’s net profit for the first quarter surged 211% to $58,321 million, compared year-on-year with $18,775 million in the same quarter of the previous fiscal year, as per the official statements.

On a sequential basis, the tech giant’s net profits advanced 36% from $42,960 in the fourth quarter of the year ended FY2026.

From the $80 billion buyback plan, margin cues, revenue snapshot, to dividend hike, and future outlook for the upcoming second quarter, investors remained focused on the list of key announcements in the company’s Q1 earnings release.

Key takeaways from Nvidia Q1 earnings

Nvidia buyback plan & dividend hike

Nvidia’s board of directors, after their quarterly meeting, approved an $80 billion share buyback plan in an effort to return more cash to its shareholders.

“On May 18, 2026, the Board of Directors approved an additional $80.0 billion to the Company’s share repurchase authorisation, without expiration,” as per the official statement.

The tech company also announced that it they are increasing the quarterly cash dividend payment to $0.25 per share for every share an eligible investor owns at Nvidia, from its earlier $0.01 per share level.

The dividend will be paid on June 26, 2026, after determining the eligibility of shareholders as of June 4, 2026, the pre-set record date for the corporate action.

Revenue snapshot

In the official filing, Nvidia disclosed that the company’s revenues for the first quarter of FY27 advanced by 85% to $81,615 million, from $44,062 million in the same period last year. On a sequential basis, the company’s revenue from core operations rose 20% from $68,127 million in the previous quarter.

The overall revenue rise was supported by the record earnings from the data centre compute and data centre networking businesses. The revenues from the data centre compute business were up 77% YoY to $60.4 billion, while the data centre networking revenues were up 199% YoY to $14.8 billion in the first quarter.

The company also announced that Nvidia will be shifting to a new reporting framework that better reflects its current and future growth drivers, consolidating to two market segments – Data Centre and Edge Computing.

While the Data Centre business will have two sub-markets, Hyperscale and ACIE, the Edge Computing business will cover data processing devices for agentic and physical AI, including PCs, game consoles, workstations, AI-RAN base stations, robotics and automotive.

Margin expansion cues

Nvidia’s gross margins witnessed a 14.4 percentage point expansion to 74.9% in the first quarter, from 60.5% in the first quarter of the previous fiscal year, as per the data.

Although the company’s margins remained flat sequentially, the lower inventory provisions supported the margin growth. Nvidia was charged with a $4.5 billion fee associated with H20 excess inventory and purchase obligations last year.

“GAAP and non-GAAP gross margins were approximately flat sequentially as our Blackwell architecture remains the majority of our revenue,” said Colette Kress, CFO of Nvidia Corp.

Q2 FY27 outlook for Nvidia

Looking ahead at Q2 results, Nvidia expects its revenues to expand to $91 billion, with a tolerance band of 2% on either side, although the company does not expect any data centre compute revenues to emerge from China in the outlook.

The AI chipmaking giant forecasts its GAAP and non-GAAP gross margins to be 74.9% and 75.0%, respectively, with a tolerance band of 50 basis points on either side.

Nvidia’s expects its operating expenses to come around $8.5 billion (GAAP) and $8.3 billion (non-GAAP) in the upcoming second quarter results.

“For the full year fiscal 2027, NVIDIA expects GAAP and non-GAAP tax rates to be between 16.0% and 18.0%, excluding any discrete items and material changes to NVIDIA’s tax environment,” the company said in its statement.

What did Jensen Huang say?

Nvidia CEO Jensen Huang, in his earnings call with investors, assured people that the tech giant is expected to keep up with its financial performance growth with the help of its wider customer base and new product pipeline as it targets the $1 trillion sales figure for AI chips.

“We should be growing faster than hyperscale capex,” said Huang, according to a Reuters report. It also highlighted that experts predict that Nvidia is set to witness tough competition in the near future with the rise in capabilities of competitors in the market.

Diving deeper into the business, Jensen Huang said that he expects Nvidia’s Vera to become the second largest contributor to chip sales beyond the Blackwell and Rubin semiconductor chips.

Nvidia share price

Nvidia shares closed 1.3% higher at $223.47 after Wednesday’s stock market session on the backdrop of the company’s earnings release. The shares surged to around $226 during the intraday trading session as investors reacted to the earnings announcement.

Nasdaq data showed that Nvidia shares have delivered around 1,390% returns on their investment in the last five years, 66% gains in the past one year, and over 18% returns so far in 2026.

The company’s market capitalisation (m-cap) was at $5.34 trillion as of the US market close on Wednesday, May 20.