Nvidia, the world's largest company by market capitalization and the leader in artificial intelligence (AI) chips, posted quarterly earnings that exceeded expectations, as Big Tech's intensifying race to invest in AI drove its data center revenue to double.
Nvidia announced Thursday in its fiscal 2027 first-quarter (February to April) earnings report that quarterly revenue rose 85% year-on-year to $81.6 billion (122.28 trillion won).
CNBC reported that Nvidia's quarterly revenue surpassed market expectations of $78.9 billion. Earnings per share also came in at $1.87, beating the consensus estimate of $1.76. Nvidia's second-quarter revenue forecast of $91 billion significantly exceeded Wall Street's expectation of $86 billion.
Data center revenue grew 92% to $75.2 billion. The increase was driven by rising demand for Nvidia's graphics processing units (GPUs) and other AI chips amid massive investments by hyperscalers including Amazon Web Services (AWS), Google, Microsoft, and Meta. Combined capital expenditure (CAPEX) by major hyperscalers is expected to exceed $700 billion this year.
"The build-out of AI factories, the largest infrastructure expansion in human history, is accelerating at an astonishing pace," Nvidia CEO Jensen Huang said. "Nvidia is the only platform that runs on every cloud, supports every frontier model and open-source model, and scales everywhere AI is produced."
However, concerns are emerging over heated competition in AI chips as custom chips such as Google's tensor processing units (TPUs) are rapidly rising as alternatives to GPUs. Nvidia projected the production timeline for its next-generation GPU, Rubin, in the second quarter of 2027. Bloomberg noted that some analysts had forecast second-quarter revenue as high as $96 billion, a level Nvidia's guidance fell short of.
Nvidia shares rose 1.3% in regular trading Thursday on anticipation ahead of the earnings release but were trading slightly lower in after-hours trading following the announcement.
