Nvidia earnings underscore accelerating AI infrastructure boom

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Nvidia earnings underscore accelerating AI infrastructure boom

Nvidia delivered another strong earnings performance, beating analyst expectations and surpassing its own forward guidance, reinforcing momentum behind the accelerating AI infrastructure boom.

The company guided first-quarter fiscal year 2027 revenue to a midpoint of US$78 billion, comfortably ahead of the US$72.78 billion analysts had forecast. Importantly, this outlook assumes zero data centre revenue from China, meaning any potential easing of export restrictions could provide additional upside not currently reflected in projections.

Record revenue and profitability

Quarterly revenue reached US$68.13 billion, exceeding consensus estimates of approximately US$65.9 billion. Data centre revenue surged to a record US$62.3 billion, above expectations of US$60.4 billion, while adjusted earnings per share came in at US$1.62, compared with forecasts of US$1.53.

Net profit for the quarter totalled US$43 billion — a figure that surpasses Nvidia’s entire annual revenue as recently as 2023. For a company of its scale to maintain such rapid growth highlights the structural strength of demand across AI-driven markets.

Gross margins of 75.2% also exceeded forecasts, easing concerns about profitability as the company ramps up production of its next-generation Blackwell platform.

AI spending surge fuels growth

The results underscore continued expansion in AI-related infrastructure spending. Major technology companies — including Microsoft, Amazon, Google, and Meta — are collectively projected to invest US$650 billion in AI infrastructure in 2026, highlighting the scale of capital driving the sector.

Networking revenue alone surged 263% year-on-year to a record US$11 billion, reflecting how AI transformation extends beyond chips to full-scale data centre re-architecture.

To meet demand, Nvidia has secured US$95.2 billion in inventory and capacity commitments, nearly double the level recorded a year ago. This positions the company to supply hyperscale customers operating at unprecedented scale.

While gaming revenue softened due to supply constraints expected to persist into Q1, the segment now accounts for a smaller share of overall performance, with data centre revenue representing 91% of total revenue.

Since the rise of generative AI applications such as ChatGPT, Nvidia’s data centre revenue has expanded nearly thirteenfold. As competition intensifies and technology companies sustain historic levels of AI spending, Nvidia remains central to the evolving ecosystem — widely regarded as a key enabler of the global AI transformation.