NVIDIA shares fall after $1T AI forecast
What happened
- Nvidia shares fell after the company’s May 20 earnings report, even as it posted record quarterly revenue and repeated an aggressive Blackwell-and-Rubin sales forecast. - Colette Kress told analysts Nvidia still sees about $1 trillion in Blackwell and Rubin revenue from 2025 through 2027. (fool.com) - In the third quarter, Nvidia expects production shipments of Vera Rubin to begin, according to the company’s May 20 earnings call. (fool.com)
Why it matters
Nvidia reported record first-quarter fiscal 2027 revenue of $81.6 billion on May 20, up 85% from a year earlier, and said data center revenue rose 92% to $75.2 billion. The company also authorized an additional $80 billion in share repurchases and raised its quarterly dividend to $0.25 a share from $0.01, according to its earnings release. Yet the stock fell after the report and extended those declines in the following sessions, even after revenue and earnings topped Wall Street estimates. (fool.com) Jensen Huang, Nvidia’s chief executive, used the earnings call to argue that demand remains intact. (fool.com) He said “agentic AI has arrived,” described demand as “parabolic,” and said production shipments of the Vera Rubin platform are set to begin in the third quarter. Finance chief Colette Kress also reiterated a forecast for roughly $1 trillion in combined Blackwell and Rubin revenue from calendar 2025 through 2027. ### If the quarter was that strong, why did the stock fall? CNBC reported that Nvidia’s stock sank after the analyst call despite the earnings beat, putting it on track for a fourth straight post-earnings slide. (investor.nvidia.com) Yahoo Finance historical data show the shares closed at $215.33 on May 22, below the $222.50 close on May 20, the day of the report. The company’s own numbers left little doubt about near-term demand. Nvidia said first-quarter revenue was $81.6 billion, ahead of analyst expectations cited by CNBC, while adjusted earnings per share came in at $1.87 versus estimates of $1.76. (cnbc.com) The market reaction instead pointed to the level of expectations already embedded in the shares and to investor questions about how durable the next phase of growth will be. Bloomberg described Nvidia as facing “more investor skepticism” as it tried to show it could rely less on the giant data-center operators that fueled its rise. ### What did Nvidia say about the $1 trillion forecast? Colette Kress told analysts on the May 20 call that Nvidia had “full confidence” in about $1 trillion of Blackwell and Rubin revenue from 2025 through calendar 2027. The forecast did not refer to total company revenue; it referred specifically to those product families, according to the earnings transcript. The same call added a nearer-term marker. Kress said production shipments of Vera Rubin would begin in the third quarter, with the ramp continuing in following quarters. Huang has separately described Vera Rubin as opening a new CPU market opportunity tied to agentic AI workloads. (investor.nvidia.com) ### Why did the new reporting breakdown get attention? Stratechery said Nvidia changed its reporting to separate hyperscaler sales from the rest of the business, drawing a line between the biggest cloud buyers and other customers. In the quarter, hyperscale revenue was about $38 billion, roughly half of data center revenue, while the ACIE segment was $37 billion and grew 31% sequentially, according to the earnings transcript. (fool.com) Ben Thompson wrote that the split highlights where Nvidia may face more commoditization pressure versus where it can still sell more of a broader stack. (fool.com) That view was Thompson’s interpretation, not Nvidia’s stated rationale, but investors focused on the change because it offered a clearer look at where future pricing power might sit. ### Where are investors looking next in the AI buildout? The Motley Fool said commentary after the report pushed attention toward networking and optical interconnects as likely bottlenecks as AI systems scale. Nvidia’s own call showed why that argument gained traction: data center networking revenue reached $15 billion and nearly tripled year over year, while InfiniBand revenue more than quadrupled year over year. (stratechery.com) That discussion has spilled over to suppliers around Nvidia’s systems. The Motley Fool highlighted Marvell as a possible beneficiary of demand for faster and more power-efficient data movement, while a separate earnings preview cited HP in the broader infrastructure theme around AI systems. (stratechery.com) Those references came from market commentary, not from Nvidia. Nvidia’s next scheduled checkpoint is its fiscal second-quarter report later this summer, when investors are likely to look for updates on Vera Rubin production shipments, hyperscaler demand and networking growth. (fool.com) The company’s investor relations site lists quarterly filings, presentations and call materials that will show whether the third-quarter Rubin timeline and the 2025-2027 revenue target remain unchanged. (investor.nvidia.com) (fool.com)
Key numbers
- Nvidia shares fell after the company’s May 20 earnings report, even as it posted record quarterly revenue and repeated an aggressive Blackwell-and-Rubin sales forecast.
- Colette Kress told analysts Nvidia still sees about $1 trillion in Blackwell and Rubin revenue from 2025 through 2027.
- (fool.com) In the third quarter, Nvidia expects production shipments of Vera Rubin to begin, according to the company’s May 20 earnings call.
- (fool.com) Nvidia reported record first-quarter fiscal 2027 revenue of $81.6 billion on May 20, up 85% from a year earlier, and said data center revenue rose 92% to $75.2 billion.
What happens next
- Nvidia reported record first-quarter fiscal 2027 revenue of $81.6 billion on May 20, up 85% from a year earlier, and said data center revenue rose 92% to $75.2 billion.
- (fool.com) He said “agentic AI has arrived,” described demand as “parabolic,” and said production shipments of the Vera Rubin platform are set to begin in the third quarter.
- (investor.nvidia.com) Yahoo Finance historical data show the shares closed at $215.33 on May 22, below the $222.50 close on May 20, the day of the report.
Quick answers
What happened in NVIDIA shares fall after $1T AI forecast?
Nvidia shares fell after the company’s May 20 earnings report, even as it posted record quarterly revenue and repeated an aggressive Blackwell-and-Rubin sales forecast. Colette Kress told analysts Nvidia still sees about $1 trillion in Blackwell and Rubin revenue from 2025 through 2027. (fool.com) In the third quarter, Nvidia expects production shipments of Vera Rubin to begin, according to the company’s May 20 earnings call. (fool.com)
Why does NVIDIA shares fall after $1T AI forecast matter?
Nvidia reported record first-quarter fiscal 2027 revenue of $81.6 billion on May 20, up 85% from a year earlier, and said data center revenue rose 92% to $75.2 billion. The company also authorized an additional $80 billion in share repurchases and raised its quarterly dividend to $0.25 a share from $0.01, according to its earnings release. Yet the stock fell after the report and extended those declines in the following sessions, even after revenue and earnings topped Wall Street estimates. (fool.com) Jensen Huang, Nvidia’s chief executive, used the earnings call to argue that demand remains intact. (fool.com) He said “agentic AI has arrived,” described demand as “parabolic,” and said production shipments of the Vera Rubin platform are set to begin in the third quarter. Finance chief Colette Kress also reiterated a forecast for roughly $1 trillion in combined Blackwell and Rubin revenue from calendar 2025 through 2027. If the quarter was that strong, why did the stock fall? CNBC reported that Nvidia’s stock sank after the analyst call despite the earnings beat, putting it on track for a fourth straight post-earnings slide. (investor.nvidia.com) Yahoo Finance historical data show the shares closed at $215.33 on May 22, below the $222.50 close on May 20, the day of the report. The company’s own numbers left little doubt about near-term demand. Nvidia said first-quarter revenue was $81.6 billion, ahead of analyst expectations cited by CNBC, while adjusted earnings per share came in at $1.87 versus estimates of $1.76. (cnbc.com) The market reaction instead pointed to the level of expectations already embedded in the shares and to investor questions about how durable the next phase of growth will be. Bloomberg described Nvidia as facing “more investor skepticism” as it tried to show it could rely less on the giant data-center operators that fueled its rise. What did Nvidia say about the $1 trillion forecast? Colette Kress told analysts on the May 20 call that Nvidia had “full confidence” in about $1 trillion of Blackwell and Rubin revenue from 2025 through calendar 2027. The forecast did not refer to total company revenue; it referred specifically to those product families, according to the earnings transcript. The same call added a nearer-term marker. Kress said production shipments of Vera Rubin would begin in the third quarter, with the ramp continuing in following quarters. Huang has separately described Vera Rubin as opening a new CPU market opportunity tied to agentic AI workloads. (investor.nvidia.com) Why did the new reporting breakdown get attention? Stratechery said Nvidia changed its reporting to separate hyperscaler sales from the rest of the business, drawing a line between the biggest cloud buyers and other customers. In the quarter, hyperscale revenue was about $38 billion, roughly half of data center revenue, while the ACIE segment was $37 billion and grew 31% sequentially, according to the earnings transcript. (fool.com) Ben Thompson wrote that the split highlights where Nvidia may face more commoditization pressure versus where it can still sell more of a broader stack. (fool.com) That view was Thompson’s interpretation, not Nvidia’s stated rationale, but investors focused on the change because it offered a clearer look at where future pricing power might sit. Where are investors looking next in the AI buildout? The Motley Fool said commentary after the report pushed attention toward networking and optical interconnects as likely bottlenecks as AI systems scale. Nvidia’s own call showed why that argument gained traction: data center networking revenue reached $15 billion and nearly tripled year over year, while InfiniBand revenue more than quadrupled year over year. (stratechery.com) That discussion has spilled over to suppliers around Nvidia’s systems. The Motley Fool highlighted Marvell as a possible beneficiary of demand for faster and more power-efficient data movement, while a separate earnings preview cited HP in the broader infrastructure theme around AI systems. (stratechery.com) Those references came from market commentary, not from Nvidia. Nvidia’s next scheduled checkpoint is its fiscal second-quarter report later this summer, when investors are likely to look for updates on Vera Rubin production shipments, hyperscaler demand and networking growth. (fool.com) The company’s investor relations site lists quarterly filings, presentations and call materials that will show whether the third-quarter Rubin timeline and the 2025-2027 revenue target remain unchanged. (investor.nvidia.com) (fool.com)
