Nvidia's AI Business Hits New Heights
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 22 2026
0mins
Source: NASDAQ.COM
- Significant Revenue Growth: Nvidia's latest earnings report reveals an 85% year-over-year increase in quarterly revenue to $81 billion, with GAAP net income soaring 211% to $58 billion, both reaching record highs and reflecting the company's strong performance and market demand in the AI sector.
- New Product Launches: Over the past year and a half, Nvidia has released the Blackwell and Blackwell Ultra platforms, focusing on AI inference processing, which has driven a surge in demand for these products, showcasing the company's ongoing commitment to technological innovation.
- New Growth Driver: CEO Jensen Huang announced the new product Vera Rubin, expected to become a significant growth engine focused on agentic AI, potentially opening a $200 billion market for the company and further solidifying its leadership in the CPU market.
- Optimistic Market Outlook: Nvidia anticipates $20 billion in CPU revenue this year and plans to ship Rubin systems in Q3, with strong customer demand indicating the company's long-term growth potential in AI technology applications, providing positive signals for shareholders.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 205.100
Low
200.00
Averages
264.97
High
352.00
Current: 205.100
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is an artificial intelligence (AI) infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. Its segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing and networking platforms and AI solutions and software, and automotive platforms and autonomous and electric vehicle solutions, including software. The Graphics segment includes GeForce GPUs for gaming and personal computers (PCs), and Quadro/NVIDIA RTX GPUs for enterprise workstation graphics. Its technology stack includes the foundational NVIDIA CUDA development platform that runs on all NVIDIA GPUs, as well as hundreds of domain-specific software libraries, frameworks, algorithms, software development kits (SDKs), and application programming interfaces (APIs). Its platforms address four markets, which include Data Center, Gaming, Professional Visualization, and Automotive.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Excellent Profit Margins: In Q1 2027, Nvidia reported an operating margin of 65.6%, demonstrating its strong profitability in the rapidly growing AI market.
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- Remarkable Investment Returns: An investment of $10,000 in Nvidia a decade ago would now be worth nearly $1.9 million, yielding a staggering 18,720% return, far surpassing Bitcoin's 11,040% increase, highlighting its leadership in the AI sector.
- Strong Revenue Growth: Nvidia's revenue surged by 1,033% over the past three years, reflecting robust demand for its AI data center hardware and software, solidifying its market dominance.
- Excellent Profit Margins: In Q1 2027, Nvidia reported an operating margin of 65.6%, demonstrating its strong profitability in the rapidly growing AI market.
See More
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- Government Equity Plan: Trump has held private meetings with executives from major AI companies like OpenAI to discuss the government acquiring voluntary equity stakes, which could significantly impact investment structures and market confidence in the AI sector.
- Legislative Proposal Impact: Senator Sanders has introduced legislation mandating the government to acquire 50% equity in AI companies, which, if passed, would profoundly affect companies like Microsoft and Nvidia, potentially constraining private value creation in the industry.
- IPO Uncertainty: OpenAI is anticipated to go public in 2026 with a valuation between $830 billion and $1 trillion, despite projecting $14 billion in losses, and the potential government equity stake could directly influence its IPO valuation.
- Increased Market Risk: Sanders' proposal has raised uncertainties for Microsoft, Nvidia, and Alphabet, as investors worry that government co-ownership could limit future monetization opportunities, thereby increasing short-term market risks.
See More
AI Chip Stocks Dip: A Buying Opportunity?
- AI Chip Market Performance: AI chip designers like Nvidia and Broadcom have been significant contributors to the S&P 500's gains during the bull market, but recently, Broadcom's disappointing AI chip sales forecast led to a 13% drop in its stock over the first five trading days of June.
- Revenue Growth Potential: Despite Broadcom's forecast of $16 billion in AI semiconductor revenue falling short of the $17 billion expected by analysts, this still represents a remarkable 180% year-over-year growth, indicating strong demand and future growth potential in the AI chip market.
- Investor Sentiment Shift: Following Broadcom's failure to meet expectations, the entire sector faced selling pressure, with Nvidia and AMD's stocks declining by 2.8% and 9.6%, respectively, reflecting a cautious sentiment among investors towards AI chip stocks.
- Investment Advice: Nvidia's CEO Jensen Huang emphasized that now is a great time to buy AI chip stocks, echoing Warren Buffett's investment philosophy of purchasing quality stocks during downturns, especially as AI technology increasingly addresses real-world problems.
See More
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- Disappointing Forecast: Broadcom's forecast of $16 billion in AI semiconductor revenue for the upcoming quarter fell short of analysts' expectations of over $17 billion, leading to a 13% drop in its stock price during the first week of trading, indicating a shake in market confidence in AI chip stocks.
- Sector-wide Decline: Following Broadcom's disappointing results, Nvidia and AMD also saw their stock prices decline by 2.8% and 9.6% respectively, reflecting investor concerns about the entire AI chip market and potentially triggering broader selling pressure across the sector.
- Future Growth Potential: Despite Broadcom's projected full-year AI chip revenue of $56 billion representing a 180% year-over-year increase, the failure to meet market expectations highlights that investor expectations for performance are rising even in a growth context.
- Investor Confidence Rebuilding: Nvidia's CEO Jensen Huang stated that now is a great time to buy AI chip stocks, aligning with Warren Buffett's investment philosophy, which may provide investors with a buying opportunity during market dips.
See More
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- Diversifying Customer Base: Nvidia is expanding its customer base by collaborating with governments, reducing reliance on a handful of hyperscale clients, particularly as cloud providers like Amazon and Google may develop their own AI chips.
- Growth in Sovereign AI Projects: According to Jim Cramer, sovereign AI initiatives now account for approximately 14% of Nvidia's business, with countries such as Singapore, India, and Germany actively investing in these projects, which are expected to drive demand growth further.
- Long-Term Investment Returns: Unlike hyperscale customers, these nations are not seeking immediate financial returns but are focused on building domestic AI infrastructure, which will provide Nvidia with a more stable revenue source.
- Optimistic Market Outlook: As sovereign AI projects progress, Nvidia's market opportunities will become increasingly significant, with Cramer believing that the launch of these initiatives will substantially reduce Nvidia's dependence on a few major clients, thereby strengthening its market position.
See More
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- Production Capacity Boost: Lingyi iTech's newly opened humanoid robot factory in Beijing has already produced 300 robots since its late April launch, with plans to ramp up production to 10,000 units this year, showcasing its strong competitive position in the rapidly growing robotics market.
- Future Production Goals: The company aims to increase annual production to 500,000 units by 2030, which could halve the current price of humanoid robots, approximately $30,000 each, thereby driving broader market acceptance and application.
- Market Demand Observation: Despite over 100 startups in China developing humanoid robots, most orders so far are for just one or two units, indicating that market demand is still in its early stages, with future repeat orders being crucial for growth.
- Government Support and Global Impact: The Chinese government is actively promoting the humanoid robotics industry, with Lingyi planning to open new factories overseas, reflecting its intent to expand in global markets and highlighting China's strategic position in high-tech sectors.
See More
