[Summary]
NVIDIA's financial results for the first quarter of fiscal year 2027 were quite strong, just looking at the numbers.
Sales were $81.615 billion, an 85% increase compared to the same period last year. Data center revenue was $75.2 billion, an increase of 92% year over year. Non-GAAP EPS was $1.87 and Non-GAAP gross margin was 75.0%. Additionally, the company's revenue guidance for the upcoming second quarter was $91 billion, which exceeded market expectations.
For a normal company, this would be an excellent financial result.
However, NVIDIA's case is a little different. The initial performance of the stock price was not spectacular. The stock closed at $223.47 in regular trading on May 20, U.S. time, and fell slightly to the $222 level in after-hours trading.
I don't think this is a disappointment, but rather a case of expectations being too high. Currently, ``good financial results'' are not enough for NVIDIA. The market is looking at growth sustainability, which comes next to good financial results.
In conclusion, the results confirm the continuation of the AI infrastructure market price in the medium to long term. On the other hand, in the short term, it is more important to wait for the market to hit the market than to buy after it.
What was confirmed in this financial results
The most important thing about these financial results is that AI CAPEX has not stopped yet.
NVIDIA's data center sales ballooned to $75.2 billion, accounting for about 92% of its total sales. It's hard to see NVIDIA as just a GPU manufacturer anymore. In reality, it is an AI infrastructure company that includes cloud, AI factory, network, and inference infrastructure.
The main figures are as follows.
| Item | Achievements |
|---|---|
| Sales | $81.615 billion |
| Sales growth rate | 85% increase compared to the same period last year |
| Data center sales | $75.2 billion |
| Data center growth rate | 92% increase compared to the same period last year |
| GAAP EPS | $2.39 |
| Non-GAAP EPS | $1.87 |
| Non-GAAP gross profit margin | 75.0% |
| Q2 FY2027 sales guidance | $91 billion, plus or minus 2% |
What we should be looking at here is Q2 guidance rather than Q1 results.
The market was already assuming NVIDIA's strong financial results. Therefore, it is difficult for stock prices to move just by having a strong Q1. Rather, it's more important that sales are now in the $90 billion range in the next quarter.
Why didn't stock prices just jump?
Financial results are strong. Guidance is also strong. There will also be share buybacks and dividend increases.
Still, the reason the stock price reaction was calm is because the market hurdles for NVIDIA have been extremely high.
NVIDIA is no ordinary large-cap stock. It is responsible for the AI market itself, the psychology of the NASDAQ, the semiconductor cycle, data center CAPEX, and power infrastructure investment.
Therefore, the market is looking at the following points, not just ``Did it exceed expectations?''
| Issues that the market is looking at | Views |
|---|---|
| Sustainability of sales growth | Is the $90 billion level a temporary phenomenon |
| Blackwell demand | Will supply constraints continue to be interpreted positively |
| Rubin migration | Will there be any delays in the next generation platform in 2027 |
| China Risk | Can the impact of export restrictions be absorbed by other regions |
| AI investment recovery | Is hyperscaler CAPEX justified |
| Inference demand | Will learning demand become the next revenue pillar |
Personally, I don't think the latest financial results indicate the collapse of the AI bubble. On the contrary, it confirmed that investment in AI infrastructure is still quite strong.
However, it is natural that stock prices do not jump immediately. At this point, it's hard to be surprised by the market.
Basic stance: Bullish in the medium to long term, waiting for a push in the short term
The investment strategy can be organized as follows.
Key point
Key point
Key pointWhen buying an NVIDIA device, the scariest thing in the short term is ``taking profits after all the good news has come out.'' The stock price had already risen considerably, and expectations had been factored in before the earnings report.
On the other hand, if we look at the medium-to-long term, sales of $81.6 billion and guidance for next quarter of $91 billion are quite heavy numbers. These numbers are not for companies whose demand for AI has stalled.
In other words, if the price drops, it can easily be seen as a push, but it is not a time to rush to chase the high price.
Spread to Japanese stocks: The favorite is peripheral bottlenecks of AI semiconductors
In Japanese stocks, there is a sense of security in semiconductor-related stocks following NVIDIA's financial results.
However, since NVIDIA itself has not jumped significantly after hours, Japanese stocks are likely to be more selective on a stock-by-stock basis rather than being bought up overall.
The following groups are easy to pay attention to.
| Field | Main stocks | Points to watch |
|---|---|---|
| Semiconductor manufacturing equipment | Tokyo Electron, SCREEN | Advanced investment, 2nm, capital investment for AI servers |
| Inspection/Tester | Advantest | Inspection demand for GPU, HBM, and AI accelerators |
| Post-processing/precision processing | DISCO | HBM, advanced packaging, thinning/cutting demand |
| EUV/Advanced Inspection | Lasertec | Expectations for TSMC and Advanced Foundry Investment |
| Materials/Silicon | Shin-Etsu Chemical, SUMCO | Recovery in wafer demand and next-generation investment |
What I particularly want to see is not NVIDIA's sales itself, but where bottlenecks remain.
In the AI semiconductor market, the places where the most profits are made and the places where stock prices move the most are not necessarily the same. NVIDIA will create demand, TSMC will be responsible for manufacturing, and expectations will spread to Japanese equipment, inspection, and back-end processing companies.
Japanese stocks' strategy is to take advantage of this time lag.
How to view short-term trading
In the short term, I would like to keep an eye on semiconductor stocks.
If Japanese stocks start high due to NVIDIA's financial results, it is better to look at the price movements in the previous market rather than jumping in right away. In particular, stocks that have been bought before the financial results are sometimes sold when good news runs out.
There are three points to look at:
| Check items | Judgment |
|---|---|
| Will the stock reach a new high with increased trading volume? | Continue to buy strong stocks |
| Will it start high and then stall soon? | Beware of falling skies |
| Even if it falls, will there be buying near the previous day's closing price? | Candidate for the push |
In the short term, stocks with strong associations with NVIDIA, such as Advantest and Disco, are more likely to experience wild price movements.
I think it's more practical to look at the strengths and weaknesses after the financial results have been digested, rather than trying to force an initial response.
Medium-term investment theme
From a medium-term perspective, the latest financial results reconfirmed the following themes.
- AI factory investment *Transition from Blackwell to Vera Rubin
- HBM and advanced packaging
- Data center power and cooling
- Expanding demand for inference
- Sovereign AI *Edge AI, robotics, autonomous driving
Of particular importance is that NVIDIA has introduced Data Center and Edge Computing as new reporting categories.
This shows the market that AI doesn't end with the cloud. After data centers, it will expand to PCs, game consoles, workstations, AI-RAN, robotics, and automobiles.
If this view is correct, from the latter half of 2026 to 2027, investment targets will expand from NVIDIA alone to peripheral infrastructure, back-end processes, electricity, optical communications, and edge AI.
Risk: Bullish but doubts remain
Although the financial results are bullish and good, it does not mean that risks have disappeared.
In fact, it is precisely because the stock price has grown so much that doubts in the market continue to remain.
| Risk | Contents |
|---|---|
| AI investment recovery risk | Will the huge CAPEX of Meta, Microsoft, Google, etc. really become profitable |
| Oversupply risk | Possibility of surplus GPUs and AI servers after 2027 |
| Rise of ASIC | Competition among Google TPU, Amazon Trainium, Broadcom ASIC, etc. |
| Chinese regulations | Restrictions on products destined for China such as H20 and geopolitical risks |
| Valuation | Expectations are so high that it is difficult for stock prices to react even to strong financial results |
The market does not doubt NVIDIA's growth. The question is how long the current growth rate will continue.
If you make a mistake here, you will misunderstand the reason why stock prices are falling despite strong financial results.
Conclusion
NVIDIA's financial results confirmed the continuation of the AI infrastructure market.
$81.6 billion in revenue, $75.2 billion in data centers, and Q2 guidance of $91.0 billion. The numbers are pretty strong. At the very least, the results do not indicate that demand for AI suddenly stopped.
On the other hand, the initial performance of stock prices was calm. This is not NVIDIA's weakness, but rather its high expectations.
As an investment strategy, rather than chasing NVIDIA itself at a high price, I would rather wait for a push. Regarding Japanese stocks, we will select bottlenecks around AI semiconductors, focusing on Advantest, Tokyo Electron, Disco, Lasertec, etc.
The market price from here on is not just a market price to buy NVIDIA.
The market will use NVIDIA financial results to find out which parts of the AI infrastructure still have pricing power and supply constraints.
Reference information
NVIDIA Official Announcement: NVIDIA Announces Financial Results for First Quarter Fiscal 2027 https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-first-quarter-fiscal-2027