---
title: "NVDA: With Big Tech going in-house, can Jensen Huang find new allies?"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/40969925.md"
description: "NVDA released FY2027 Q1 results after the US close in the early hours of May 21, 2026 Beijing time (quarter ended Apr 2026). 1) Core operating metrics: $NVIDIA(NVDA.US) delivered revenue of $81.6bn, beating the raised buy-side estimates ($78–80bn).QoQ revenue increased by $13.5bn, driven almost entirely by the Data Center segment as Blackwell moved into volume production.GPM was 74.9%, down 10bps QoQ..."
datetime: "2026-05-21T02:25:03.000Z"
locales:
  - [en](https://longbridge.com/en/topics/40969925.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/40969925.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/40969925.md)
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# NVDA: With Big Tech going in-house, can Jensen Huang find new allies?

NVIDIA (NVDA.O) released its FY2027 Q1 results (for the quarter ended Apr 2026) in the U.S. after-hours on May 21, Beijing time. Key details are as follows.

**1\. Core operating metrics**: $NVIDIA(NVDA.US) **reported total revenue of $81.6bn, beating the raised buyside range ($78-80bn)**. Quarterly revenue rose by $13.5bn QoQ, driven almost entirely by the data center business as Blackwell ramped.

**GPM came in at 74.9%, down 10bps QoQ and broadly in line with the Street (75%).** With B300 ramping, margins have recovered to around 75%.

**2\. Data center**: **Revenue was $75.2bn, up $12.9bn QoQ**. The increase mainly reflects scaled deliveries of B300 series chips, with Blackwell now the dominant architecture across customer types.

The company changed disclosure from 'Compute and Networking' to 'Hyperscale customers and Other cloud customers'. Specifically, **hyperscale revenue was $37.9bn (+$4.0bn QoQ), while other cloud revenue was $37.4bn (+$8.9bn QoQ), the largest incremental driver**.

With large cloud vendors pushing in-house silicon, **Dolphin Research believes the customer-based split aims to highlight NVIDIA's sustained growth in industrial and enterprise cloud**. The intent is to underscore momentum outside the mega-cap hyperscalers.

**3\. Edge computing**: All non-data center businesses have been consolidated into Edge, including PCs, consoles, workstations, AI-RAN base stations, robotics and autos. These sub-segments are no longer disclosed separately.

**Edge revenue was $6.4bn, up 29% YoY.** Gaming is the largest piece within Edge. Growth this quarter was mainly driven by gaming.

**4\. Profit**: **Core OP was $53.5bn, up 147% YoY**, helped by rapid top-line growth and GPM back near 75% (the prior-year quarter saw a margin air-pocket due to the H20 ban). **Core OPM reached 65%**.

**5\. Next-quarter guide**: **The company guides FY2027 Q2 (2Q26) revenue to $91.0bn, up $9.4bn QoQ**, which excludes China data center compute revenue and tops the raised buyside view (~$89bn). **GAAP GPM is guided to 74.9% for next quarter, flat QoQ**, essentially in line with the Street (74.8%).

**Dolphin take: The compute king is being hunted on 'value'**

At GTC, Jensen Huang raised the **AI outlook** again, expecting **data center revenue to total $1tn across 2025-2027 (vs. $500bn guided at last year's GTC)**. The market is not particularly worried about FY2027-28, so a small beat this quarter is unlikely to meaningfully lift the stock.

Capex at the tech majors is still moving higher, NVIDIA's AI chip share continues to rise, and the company offered a Vera Rubin plan tailored for agentic workflows. This includes more suitable system-level compute for agentic inference.

a. It developed an in-memory inference context platform (ICMS). The goal is to ease the 'memory wall'.

b. It introduced Groq 3 LPU to accelerate decode. This targets the output stage.

c. It uses its Vera CPU to take over task scheduling. This aims to improve efficiency.

![4](https://pub.pbkrs.com/uploads/2026/52c07487513afe127cd7eb25436008a9?x-oss-process=style/lg)

However, NVIDIA's monopoly premium is fading. Training and inference should be viewed separately: NVIDIA still has clear advantages in training, but **post-training inference repeatedly runs identical compute and is more sensitive to token throughput, latency and cost, making it a prime target for in-house chips to replace GPUs**.

As inference shifts from chatbots to agentic reasoning, the raw compute bottleneck is easing. Memory, CPUs and adjacent assets are becoming the more urgent constraints.

**NVIDIA's products and system-level solutions still lead by a wide margin**. Yet as AI hits a phase where 'memory, CPU, interconnect and value' matter more, and cloud vendors have fallback options for inference, the moat and pricing power that were unique in the training era have weakened. This is a structural shift in where bottlenecks and value accrue.

That said, with industry beta plus Blackwell volume, NVIDIA is squarely in an earnings release phase. Shares should track Blackwell shipments and the Vera Rubin rollout in 2H, which is better tuned for inference.

NVIDIA's current market cap (~$5.4tn) implies about 18x PE on FY2028 net income. This assumes a two-year revenue CAGR of ~60%, ~74% GPM and a ~17% tax rate, with high growth through FY2026-28 guided by management's data center outlook.

Dolphin Research set a $175-240 target range after the last print, and the recent high near $236 is close to the top end. If Vera Rubin ships ahead of plan, the stock could clear $250, **but a 'double play' of multiple expansion and earnings like the past two years will be hard; 2026 may rely on EPS alone to support the stock**.

Dolphin Research's detailed analysis of NVIDIA's results follows below. Further detail is provided in the sections that follow.

**I. Business overview**

With continued data center expansion, it now exceeds 90% of revenue and is the largest contributor. The company reclassified gaming, autos and other lines into a new 'Edge computing' bucket and stopped separate disclosure.

By segment, the details are as follows. Key lines are outlined below.

**1) Data center**: This is the main focus area, with core products including Blackwell compute and InfiniBand networking and core customers across Amazon, Microsoft and Google.

**The business is in the Blackwell cycle with B300/GB300 as the workhorses.** As Rubin ramps in 2H, the cycle will transition from Blackwell to Rubin.

**2) Edge computing**: This includes PCs, consoles, workstations, AI-RAN base stations, robotics and autos. Sub-segment performance is no longer broken out.

Within Edge, gaming is the largest sub-segment. Current products are the RTX40 and RTX50 series, with gamers and PC OEMs as primary customers.

**II. Core metrics: A modest beat**

**2.1 Revenue**: **FY2027 Q1 (1Q26) revenue was $81.6bn, +85% YoY and above the raised buyside range ($78-80bn)**. The $13.5bn QoQ step-up came almost entirely from data center as Blackwell scaled.

**For next quarter, guidance is $91.0bn, up $9.4bn QoQ and above the raised buyside view ($89bn).** Growth next quarter should still be led by B300/GB300. Rubin begins mass production in 3Q26.

**2.2 GAAP GPM: FY2027 Q1 (1Q26) GAAP GPM was 74.9%, broadly in line with the Street (75%).** The sharp dip a year ago was linked to the H20 restrictions.

**Management guides next quarter GAAP GPM to 74.9%**, flat QoQ and in line with expectations (74.8%). **With Blackwell ramping, margins have moved back toward ~75%**.

**Management previously indicated a 75% target GPM for FY2027.** This provides some confidence, though investors still worry about post-FY2027 downside risk to margins. That risk remains a debate into FY2028 and beyond.

**III. Core business trends: Non-megacap cloud drove the bulk of the increment**

On the back of AI capex, data center (compute + networking) now exceeds 90% of revenue. Other businesses have been squeezed to under 10% and are now grouped under Edge without separate disclosure.

**3.1 Data center: FY2027 Q1 (1Q26) data center revenue was $75.2bn, +92% YoY.** It remains the key focus, with growth this quarter primarily from increased Blackwell production, driven by accelerated computing and AI.

By line item: **① Compute revenue was around $60bn, up $8.7bn QoQ, with B300 shipments contributing most of the increase**. **② Networking revenue was around $15.1bn, up $4.2bn QoQ**.

Cloud players remain the largest buyers of AI chips, so their capex underpins NVIDIA's data center growth. **Based on commentary from Google, Meta, Microsoft and Amazon, Dolphin Research expects combined 2026 capex to exceed $700bn, up ~80% YoY**, providing a strong backdrop for FY2027 growth.

**Beyond downstream capex, competition from in-house ASICs is top of mind.** The AI chip market is concentrated among NVIDIA, 'Google + Broadcom', and AMD, with these three taking over 90% share. **Since model development splits into training and inference, NVIDIA's GPUs still dominate training, but on lower-spec inference, Google TPUs and other in-house parts offer better value**.

Upstream, NVIDIA's high margins extract a large share of industry profit, pressuring downstream economics. **As workloads move into inference, dependence on NVIDIA falls sharply, increasing incentives to build in-house or switch to ASIC alternatives**.

Against this backdrop of in-house silicon across the majors, **NVIDIA's disclosure change highlights growth in industrial and enterprise cloud**. This reframes the mix by customer type.

By customer: **hyperscale revenue was $37.9bn, up $4.0bn QoQ, while other cloud was $37.4bn, up $8.9bn QoQ**. The latter was the largest source of incremental revenue.

Over the past two quarters, despite in-house efforts at the megacaps, **growth in enterprise/industrial cloud outside the big four has clearly accelerated**. Management appears keen to demonstrate sustained growth capability.

**With GPM back near 75%, any future share loss could present a 'potential headwind' to margins.** Management has set a 75% GPM target for FY2027, but mainstream estimates still model margin compression into FY2028 and later. This remains a key watch point.

**3.2 Edge computing: FY2027 Q1 (1Q26) Edge revenue was $6.4bn, +29% YoY**, mainly on RTX50 and other gaming shipments.

With data center now over 90% of mix, other lines are less material, so they have been grouped under 'Edge'. Separate disclosure has ceased.

**Within Edge, gaming is the largest sub-segment at roughly 60-70%.** Despite a soft PC and console market, NVIDIA retains a clear lead in gaming GPUs versus AMD's ~$0.72bn quarterly gaming revenue.

**IV. Key financials: Rapid growth supports a steady climb in margins**

**4.1 Core OPM**

**FY2027 Q1 (1Q26) core OPM was 65.6%, continuing to trend up**, driven by lower opex ratio.

The build-up is as follows. We break down margin drivers below.

**'Core OPM = GPM - R&D ratio - S&A ratio'**, by definition.

**1) GPM: 74.9% this quarter**, down 10bps QoQ and hovering near 75%. It remained close to the target level.

**2) R&D ratio: 7.7% this quarter**. While absolute R&D spend rose by ~$0.8bn QoQ, the ratio continued to fall on rapid revenue growth.

**3) S&A ratio:** Through the Blackwell cycle, sales and G&A stayed relatively stable. **The ratio fell to 1.6% of revenue this quarter**.

**Management guides next-quarter opex to $8.5bn.** Based on the revenue guide, the opex ratio should hold around ~9.3% next quarter.

**4.2 Core OP**

FY2027 Q1 (1Q26) net income was $58.3bn, up 71% YoY.

**Given net income includes non-operating items, we focus on core OP (GP - R&D - S&A).** Core OP was $53.5bn, up 147% YoY. Core OPM rose to 65.6%, mainly on revenue growth and margin recovery (vs. H20 restrictions a year ago).

Current growth is primarily driven by the Blackwell cycle. With management's data center outlook and Rubin mass production starting in 3Q, high growth should extend through FY2027-28.

<Ends here\>

Back catalog of Dolphin Research on NVIDIA:

**Hot topics**

Mar 18, 2026 post-GTC analyst huddle: [NVIDIA (Analyst Huddle): IT to become a token distributor; 50% of cash flow to shareholders](https://longportapp.cn/enN/topics/39326852). See link.

Mar 17, 2026 GTC minutes: [NVIDIA (GTC Minutes): LPU reshapes AI inference; compute factories head to space](https://longportapp.cn/en/topics/39303796). See link.

Mar 17, 2026 GTC conference: [NVIDIA GTC: AI's gala night — hype in, mixed feelings out?](https://longportapp.cn/en/topics/39303579). See link.

Jan 7, 2026 CES keynote: [Jensen unlocks Rubin; AI storage gets another spark](https://longportapp.cn/en/topics/37619252). See link.

Dec 7, 2025 trade controls: [H200 cleared: the 'arrow through the clouds' to a $6tn NVIDIA?](https://longportapp.cn/en/topics/37006873). See link.

Oct 29, 2025 GTC: [GTC: 'Bombshell' shipments next year — is the sky the limit for NVIDIA?](https://longportapp.cn/en/topics/35717574). See link.

Sep 10, 2025 CPX launch: [NVIDIA: Rubin CPX debuts, ready to arm-wrestle Broadcom ASICs](https://longportapp.cn/en/topics/33832831). See link.

Sep 1, 2025 analyst huddle: [NVIDIA (Huddle): Cautious on 2026, TAM of $3-4tn by 2030](https://longportapp.cn/en/topics/33512525). See link.

**Earnings season**

Feb 26, 2026 call minutes: [NVIDIA (Minutes): Compute investment tied to revenue, supply chain security prioritized](https://longportapp.cn/en/topics/38899235). See link.

Feb 26, 2026 quick take: [NVIDIA: Red-hot results vs. a cold stock — has the market fallen out of love?](https://longportapp.cn/en/topics/38895732). See link.

Nov 20, 2025 call minutes: [NVIDIA (Minutes): 75% GPM target next year; OpenAI partnership is not blind](https://longportapp.cn/en/topics/36541927). See link.

Nov 20, 2025 quick take: [Bigger than non-farm payrolls? Can NVIDIA save U.S. stocks again?](https://longportapp.cn/en/topics/36534778). See link.

Aug 28, 2025 call minutes: [NVIDIA (Minutes): GB300 shipping; Rubin on plan for mass production next year](https://longportapp.cn/en/topics/33413942). See link.

Aug 28, 2025 quick take: [NVIDIA: The No.1 stock in the universe — is 'not explosive' a sin?](https://longportapp.cn/en/topics/33409211). See link.

May 29, 2025 call minutes: [NVIDIA (Minutes): China shipment proportion unchanged](https://longportapp.cn/en/topics/27615752). See link.

May 29, 2025 quick take: [NVIDIA: Don't doubt it — still the No.1 stock in the universe](https://longportapp.cn/en/topics/30140007). See link.

Feb 27, 2025 call minutes: [NVIDIA (Minutes): China shipment proportion unchanged](https://longportapp.cn/en/topics/27615752). See link.

Feb 27, 2025 quick take: NVIDIA: Did DeepSeek puncture Jensen's 'leather jacket'?. See link.

Risk disclosure and statements for this article: [Dolphin Research disclaimer and general disclosure](https://support.longbridge.global/topics/misc/dolphin-disclaimer).

### Related Stocks

- [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md)
- [VERA.US](https://longbridge.com/en/quote/VERA.US.md)
- [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md)