NVIDIA Corporation

What they do

NVIDIA operates two segments: Compute & Networking (data-center GPUs, networking, AI software) and Graphics (gaming GPUs, professional visualization, automotive). Its technology stack includes the CUDA development platform and domain-specific libraries for AI training/inference, scientific computing, robotics, and 3D graphics. The company sells integrated hardware-software systems, including the Blackwell and upcoming Rubin platforms, to hyperscale cloud providers, enterprises, and sovereign AI projects.

Revenue drivers

• Data Center (Compute & Networking) — Record Q1 FY27 revenue of $75.2B, up 92% YoY and 21% sequentially. Compute revenue was $60.4B (+77% YoY) and networking revenue was $14.8B (+199% YoY). Blackwell systems accounted for the majority of shipments.
• Graphics (Gaming, Professional Visualization, Automotive) — Includes GeForce GPUs for gaming, Quadro for professional visualization, and DRIVE platforms for autonomous vehicles. This segment has grown more slowly than Data Center but remains a multi-billion-dollar business.
• Software and Services — NVIDIA AI Enterprise, Omniverse, and Clara software stacks provide recurring revenue; however, the company does not separately disclose software-only revenue in its segment reporting.

Recent performance

For Q1 FY27 (ended April 26, 2026), NVIDIA reported record revenue of $81.6B, up 85% YoY and 20% sequentially. GAAP net income was $58.3B ($2.39 diluted EPS), and non-GAAP net income was $45.5B ($1.87 diluted EPS). GAAP gross margin was 74.9%. Data Center revenue was a record $75.2B, driven by Blackwell platform demand. The company returned approximately $20.0B to shareholders via buybacks and dividends.

Strategy

NVIDIA is investing in end-to-end AI infrastructure, co-designing chips, networking, systems, and software for data-center-scale computing. It plans to ship the Rubin platform (Vera CPU + Blackwell GPU) in the second half of FY27. Management is transitioning to a new reporting structure with two market platforms: Data Center (sub-markets Hyperscale and ACIE) and Edge Computing (PCs, robotics, automotive). Cumulative R&D investment exceeds $76.7B. The company is expanding software stacks for agentic AI, physical AI, and enterprise AI adoption.

Risks

• Supply Chain and Manufacturing Lead Times — Long manufacturing lead times and dependency on third-party suppliers for wafers, assembly, and test could cause supply-demand mismatches and revenue volatility.
• Product Transition Complexity — The complexity of bringing up new architectures like Blackwell and Rubin has caused and may continue to cause delays, quality issues, and yield challenges, affecting revenue timing.
• Customer and Geographic Concentration — A significant portion of revenue comes from a limited number of large cloud and internet customers; the company assumes no Data Center compute revenue from China in its outlook.
• Infrastructure Resource Constraints — Availability of data center space, energy, and capital for customers to build AI infrastructure is critical; shortages could delay deployments and reduce demand for NVIDIA products.

Outlook

For Q2 FY27, NVIDIA expects revenue of $91.0B (±2%), GAAP gross margin of 74.9% (±50 bps), and GAAP operating expenses of ~$8.5B. The full-year effective tax rate is estimated at 16-18%. Management expects the Rubin platform to begin shipping in H2 FY27. The company is not assuming any Data Center compute revenue from China in its outlook.