NVIDIA beats earnings, shares fall

Nvidia posted another quarter of record growth, and the stock still fell. On May 20, the company reported first-quarter fiscal 2027 revenue of $81.6 billion, up 85% from a year earlier, with data center revenue of $75.2 billion. Adjusted earnings per share came in at $1.87, ahead of Wall Street expectations of $1.76, CNBC reported. (nvidianews.nvidia.com) Yet shares slipped after the release and were still lower in the following session, extending a pattern in which strong results have not guaranteed a positive immediate market reaction. That mismatch between operating results and stock performance has become part of the Nvidia story. The company also announced an additional $80 billion share repurchase authorization and raised its quarterly cash dividend from $0.01 to $0.25 per share. (nvidianews.nvidia.com) Even with those moves, investors who had pushed the stock higher into earnings appeared to demand more than a beat on revenue, profit and guidance. ### If the quarter was that strong, why did the stock drop? May 22 trading underscored the point. Motley Fool said Nvidia had beaten on revenue, profit and guidance, but noted that the company was coming into the report with a rich valuation and a high bar for upside surprise. CNBC’s live earnings coverage also described the report as strong while noting the stock slid after the release. (nvidianews.nvidia.com) Yahoo Finance framed the move as a muted reaction rather than a broader rejection of the AI trade. Its market coverage said investors continued to bid up AI-related names even as Nvidia stock fell after earnings, suggesting the market response was specific to expectations around Nvidia rather than a simple read-through on demand. (nvidianews.nvidia.com) ### Which numbers mattered most in the print? The quarter ended April 26, 2026, and Nvidia said first-quarter revenue rose 20% sequentially as well as 85% year over year. Data center revenue increased 92% from a year earlier to $75.2 billion, remaining the core of the company’s growth engine. Nvidia also said it returned about $20 billion to shareholders during the quarter through repurchases and dividends. (fool.com) Jensen Huang, Nvidia’s chief executive, said in the company’s release that global demand for AI infrastructure remained strong. The company guided for second-quarter revenue of about $89 billion, plus or minus 2%, setting the next test for whether current demand can keep outrunning already elevated expectations. (finance.yahoo.com) ### Why are people suddenly talking about Nvidia in server CPUs too? Tom’s Hardware reported that analyst Craig Ellis of B. Riley Securities argued Nvidia could capture about two-thirds of the x86 server CPU market from Intel and AMD. The report said Ellis projected roughly 4 million Vera CPUs in fiscal 2027 and about $20 billion in revenue tied to that push. (nvidianews.nvidia.com) That forecast matters because Nvidia has been known primarily for AI accelerators, not for controlling the broader server stack. The Ellis view, as cited by Tom’s Hardware, rests on Nvidia pairing its own CPUs with its AI systems and networking products, giving customers a more integrated platform. (nvidianews.nvidia.com) ### Is demand broadening beyond Nvidia-only infrastructure? May 21 reporting from Reuters, citing The Information, said Anthropic was in talks to rent servers powered by Microsoft-designed chips to meet rising demand for AI services. Reuters said any deal remained early and might not lead to an agreement, but the talks pointed to active efforts by major AI companies to add alternatives to Nvidia-based compute. (tomshardware.com) Microsoft has been designing Maia chips for use in its own data centers, according to CNBC. Reports about Anthropic’s interest in those systems landed at the same time investors were digesting Nvidia’s earnings, reinforcing the idea that AI demand is still expanding even as customers look for more than one source of silicon. (tomshardware.com) ### What changed on the U.S. policy side? January 23, 2025 was the date President Donald Trump signed Executive Order 14179, titled “Removing Barriers to American Leadership in Artificial Intelligence.” The order revoked earlier AI policies and directed officials to prepare an action plan aimed at sustaining U.S. AI leadership, according to the White House and the Federal Register. (money.usnews.com) That policy backdrop remains part of the market conversation because companies building AI infrastructure are operating under a looser federal posture than the one set by the Biden administration’s 2023 AI order. The next company-specific checkpoint, however, is closer: Nvidia’s second-quarter fiscal 2027 results will be measured against its $89 billion revenue outlook. (cnbc.com) (federalregister.gov) (whitehouse.gov)