--- title: "NVIDIA Earnings Countdown! An Earnings Beat Is a Near Certainty, but Wall Street Is Most Concerned About These Five Questions" type: "News" locale: "en" url: "https://longbridge.com/en/news/286986321.md" description: "Bank of America expects NVIDIA's revenue for the current quarter to reach $83 billion to $84 billion, approximately 7% above management guidance. However, beating expectations has become routine; the market is truly focused on five key controversies: whether shareholder returns will accelerate, the mass production timeline for Vera Rubin, whether gross margins can hold at 75%, how forecasts for the AI accelerator market size will be updated, and whether the competitive threat from Google's TPU and CPU is exaggerated" datetime: "2026-05-20T01:27:07.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286986321.md) - [en](https://longbridge.com/en/news/286986321.md) - [zh-HK](https://longbridge.com/zh-HK/news/286986321.md) --- # NVIDIA Earnings Countdown! An Earnings Beat Is a Near Certainty, but Wall Street Is Most Concerned About These Five Questions For NVIDIA's earnings season, the most important factor is no longer the numbers themselves. On May 18, Bank of America Securities analyst Vivek Arya and his team released a preview report for NVIDIA's Q1 earnings, which are scheduled to be announced after the market close on Wednesday, May 20 (Eastern Time). Based on historical trends over the past ten quarters, NVIDIA's actual revenue has averaged 7% to 8% above management guidance. Management previously provided an F1Q27 revenue guidance of $78 billion. Based on this, actual revenue is highly likely to fall in the $83 billion to $84 billion range, while the current market consensus expectation is only $78.7 billion. **In other words, an "Earnings Beat" is almost a foregone conclusion. However, analysts believe that what will truly move the market after the earnings release are the following five questions.** ## Cash Returns: Can NVIDIA Change Its "Stinginess"? This is the issue the report focuses on most heavily, and it is also considered the core reason for the long-term discount in NVIDIA's valuation. NVIDIA is currently the largest company by market capitalization in the S&P 500, accounting for a whopping 8.3% of the index weight, surpassing the historical peaks of Apple (7.9%) and Microsoft (7.2%). However, the problem lies in the fact that NVIDIA's shareholder return intensity is severely mismatched with its scale. The data is straightforward: From 2022 to 2025, **NVIDIA's free cash flow yield (dividends + buybacks) averaged only 47%, compared to an industry average of 80% for peer companies during the same period.** Even NVIDIA's own average over the previous decade was 80%. Meanwhile, **NVIDIA's current dividend yield is merely 0.02%, while the peer average is 0.89%.** Among equity income funds, NVIDIA is held by only 16% of funds, whereas Microsoft is held by 57% and Apple by 32%. Where did the money go? Analysts point out that NVIDIA has invested heavily in its ecosystem—OpenAI, Anthropic, and technology partners. These investments are controversial in the eyes of outsiders, with some voices labeling them as "circular financing," meaning NVIDIA lends money to customers, who then use those funds to buy NVIDIA chips. How significant is the valuation discount? Data shows that NVIDIA's expected P/E ratios for 2026/2027 are 26x/19x, respectively, while the average for the other members of the "Magnificent Seven" is 49x/42x, representing a discount of nearly 50%. A more specific comparison: Analysts predict that NVIDIA's combined free cash flow for 2026 and 2027 will exceed $430 billion, higher than the combined total of approximately $375 billion for Apple and Microsoft. However, NVIDIA's market capitalization is about $5.46 trillion, roughly 28% lower than the combined $7.5 trillion of Apple and Microsoft. **Analysts believe that if NVIDIA increases its dividends and buyback intensity, it could attract more long-term capital preferring income, narrow the valuation discount, and simultaneously dispel doubts about "circular financing." They list this potential change as a "potential catalyst for the second half of the year."** ## Vera Rubin: When Will the Next-Generation Chips Arrive? NVIDIA's current flagship product is the Blackwell series. The market is concerned about: When will the next-generation Vera Rubin platform officially ramp up volume? **The firm's judgment is the second half of 2026.** Vera Rubin (codenamed R200) uses TSMC's 3nm process and shares the "Oberon" rack architecture with Blackwell Ultra, so the product transition is relatively smooth, and the impact on gross margins is expected to be limited. Looking further ahead, Vera Rubin Ultra (codenamed VR300) will launch in the second half of 2027. At that time, it will adopt a completely new "Kyber" rack architecture, and the proportion of High Bandwidth Memory (HBM) in costs will increase further. The market also wants to hear NVIDIA's latest stance on the "trillion-dollar revenue forecast" during the earnings call—NVIDIA previously provided an outlook of cumulative revenue of $1 trillion from 2025 to 2027, but contributions from LPU (Language Processing Unit) racks, CPUs, and Vera Rubin Ultra were not included. Will this be updated this time? ## Gross Margin: Can the 75% Defense Line Hold? Gross margin is one of the core supports for NVIDIA's valuation. Analysts judge that in the short term, gross margins will remain relatively stable during the product transition period because Vera Rubin continues to use Blackwell's rack architecture. However, in the medium to long term, the rising proportion of HBM memory costs is a continuous source of pressure. Market consensus expectations show that NVIDIA's gross margin will fluctuate between 74% and 75%. The firm has no disagreement with this but emphasizes that any gross margin performance exceeding expectations will be a positive catalyst. ## How Will the AI Accelerator Market Size Forecast Be Updated? Bank of America previously provided a "trillion-dollar" forecast framework for the AI market for NVIDIA from 2025 to 2027. In this earnings report, the market is watching to see if NVIDIA will update this forecast, especially by incorporating three new growth points previously excluded: 1. **LPU (Language Processing Unit) racks** 2. **Vera CPU** (NVIDIA's self-developed server CPU) 3. **Vera Rubin Ultra** The firm expects that **by 2030, the overall market size for AI accelerators will reach approximately $1.17 trillion, with NVIDIA maintaining a market share of about 68% to 70%.** Specifically, NVIDIA's AI accelerator revenue is expected to grow from $102.2 billion in 2024 to $800 billion in 2030. During the same period, AMD will grow from $5 billion to $80.1 billion, and Broadcom from $9.3 billion to $181.9 billion. ## Is the Competitive Threat from Google's TPU and CPU Exaggerated? Recently, a narrative has circulated in the market: As AI enters the "Agentic AI" era, the importance of CPUs will surpass that of GPUs, thereby threatening NVIDIA's moat. The firm explicitly disagrees with this view, providing two reasons: **First**, NVIDIA's self-developed "Vera CPU" will have new developments disclosed at the upcoming Computex conference, and its competitiveness in the standalone CPU market should not be underestimated. **Second**, in the currently large-scale deployed Blackwell and TPU clusters, the ratio of CPUs to GPUs is already 1:2, which does not align with the narrative that "Agentic AI requires more CPUs." The conclusion is: Although the CPU market is large, there are many competitors (with strong rivals in both x86 and ARM architectures), and NVIDIA's dominant position in the GPU/AI accelerator field is difficult to shake in the short term. It is expected that by 2030, NVIDIA will maintain a revenue share of about 70% in the total AI addressable market of over $1.7 trillion. ## Valuation: The "Tech Leader" Trading at a 50% Discount Finally, returning to valuation. The report uses a set of data to directly point out the current valuation contradiction of NVIDIA. Calculating based on expected P/E ratios for CY26/27, NVIDIA is at 26x/19x, while the "Magnificent Seven" (Mag-7) average is 49x/42x—NVIDIA is discounted by nearly 50%. Calculating based on EV/FCF (Enterprise Value/Free Cash Flow), NVIDIA is at 28x/20x, while the Mag-7 average is 83x/59x—a discount of over 66%. Calculating based on PEG (Price/Earnings-to-Growth ratio), NVIDIA is at 0.41x, while the Mag-7 average is 2.61x, and the overall S&P 500 is above 1.3x. Bank of America maintains a "Buy" rating with a target price of $320, based on a CY27 expected P/E ratio of 28x (excluding cash), which is in the low-to-mid range of NVIDIA's historical valuation range of 25x to 56x. ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [XLK.US](https://longbridge.com/en/quote/XLK.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [BAC.US](https://longbridge.com/en/quote/BAC.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [MSFT.US](https://longbridge.com/en/quote/MSFT.US.md) - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [TSM.US](https://longbridge.com/en/quote/TSM.US.md) - [AMD.US](https://longbridge.com/en/quote/AMD.US.md) - [AVGO.US](https://longbridge.com/en/quote/AVGO.US.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) - [BAC-Q.US](https://longbridge.com/en/quote/BAC-Q.US.md) - [BML-L.US](https://longbridge.com/en/quote/BML-L.US.md) - [BAC-L.US](https://longbridge.com/en/quote/BAC-L.US.md) - [BAC-K.US](https://longbridge.com/en/quote/BAC-K.US.md) - [BML-H.US](https://longbridge.com/en/quote/BML-H.US.md) - [BAC-N.US](https://longbridge.com/en/quote/BAC-N.US.md) - [BAC-E.US](https://longbridge.com/en/quote/BAC-E.US.md) - [MER-K.US](https://longbridge.com/en/quote/MER-K.US.md) - [BAC-O.US](https://longbridge.com/en/quote/BAC-O.US.md) - [BML-G.US](https://longbridge.com/en/quote/BML-G.US.md) - [BAC-M.US](https://longbridge.com/en/quote/BAC-M.US.md) - [BAC-B.US](https://longbridge.com/en/quote/BAC-B.US.md) - [BML-J.US](https://longbridge.com/en/quote/BML-J.US.md) - [BAC-S.US](https://longbridge.com/en/quote/BAC-S.US.md) - [BAC-P.US](https://longbridge.com/en/quote/BAC-P.US.md) - [8648.JP](https://longbridge.com/en/quote/8648.JP.md) ## Related News & Research - [Up 110% YTD, Why Nvidia’s Backing Could Keep Nokia Stock Rallying](https://longbridge.com/en/news/287094557.md) - [Lamda wins cloud deal with Hudson River Trading to supply access to Nvidia chips](https://longbridge.com/en/news/287059961.md) - [Nvidia’s AI Lead Is Back in Focus as Wolfe Research Doubles Down](https://longbridge.com/en/news/286680544.md) - [Nvidia's $78 billion earnings test could reveal the real AI demand story](https://longbridge.com/en/news/286447895.md) - [Analysts boost Nvidia outlook as AI demand surges ahead of earnings](https://longbridge.com/en/news/286687423.md)