Nvidia Beats by $2 Billion and Guides Higher but Wall Street Sells Anyway

"Nvidia posted $68.13 billion in revenue, beating estimates by nearly $2 billion and growing 73% year over year. EPS came in at $1.62 against a $1.51 estimate, the fourth consecutive quarter of beating consensus. Free cash flow hit $34.9 billion, up 124% year over year. Non-GAAP gross margins held at 75.2%."

"Data Center Networking surged 263% year over year to $10.98 billion, driven by the NVLink compute fabric ramp on GB200 and GB300 systems. That is not a GPU story. That is an AI infrastructure story, signaling Nvidia's moat is widening beyond chips into the connective tissue of every major AI data center being built right now."

"That $78 billion guidance excludes all Data Center compute revenue from China. Export restrictions have effectively walled off one of the world's largest AI markets. Nvidia previously took a $4.5 billion charge in Q1 FY2026 tied to China restrictions on H20 chips. The market is pricing in ongoing geopolitical drag, and that anxiety is legitimate."

Nvidia reported $68.13 billion in revenue, beating estimates by $2 billion with 73% year-over-year growth and $1.62 EPS against a $1.51 estimate. Free cash flow reached $34.9 billion, up 124% year-over-year, while non-GAAP gross margins remained at 75.2%. Data Center Networking surged 263% year-over-year to $10.98 billion, demonstrating Nvidia's expanding competitive advantage beyond GPUs into AI infrastructure connectivity. Q1 FY2027 guidance of $78 billion exceeded Street expectations by approximately $5 billion. Despite these exceptional results, the stock declined 7% following the announcement, with market concerns centered on China export restrictions and lost data center compute revenue, though guidance excludes China entirely and still surpasses consensus expectations.

Read at 24/7 Wall St.