Key Morningstar Metrics for Nvidia
- : $280Fair Value Estimate
- : ★★★★Morningstar Rating
- : WideMorningstar Economic Moat Rating
- : Very HighMorningstar Uncertainty Rating
What We Thought of Nvidia’s Earnings
Nvidia NVDA reported fiscal first-quarter revenue of $81.6 billion, up 85% year over year and ahead of guidance of $78 billion. Nvidia expects April-quarter revenue of $91 billion, up 95% year over year and ahead of the FactSet consensus estimate of $87.2 billion.
Why it matters: There’s no slowdown in demand for Nvidia’s artificial intelligence gear, and the company is doing all it can to expand its supply chain to meet the insatiable demand associated with large language models and agentic AI. Nvidia’s revenue growth is broad-based across customers, and profits remain stellar.
- Data center, or DC, revenue was $75.2 billion, up 92% year over year. Revenue from hyperscale (mostly large cloud) customers was $37.9 billion, half of the total and up 115% year over year, consistent with the hefty capital expenditure plans of these customers as they race to build out AI.
- The other half of DC revenue from AI cloud (neocloud), industrial, and enterprise customers was $37.4 billion, up 74% year over year. This customer cohort does not design its own AI accelerators, and we expect Nvidia to dominate this market while still seeing a massive uptick in AI adoption.
The bottom line: We raise our fair value estimate for wide-moat Nvidia to $280 from $260, as near- and medium-term growth continues to modestly outpace our expectations. Shares were basically flattish after hours and appear undervalued to us.
- In addition to Nvidia’s excellent AI GPU growth, its networking business tripled year over year to nearly $15 billion.
- Nvidia now believes its Ethernet networking business is larger than all other Ethernet rivals combined. We view networking as a core component of Nvidia’s moat as interconnectivity between GPU racks drives superior AI performance.
Coming up: Nvidia should also earn $20 billion in stand-alone CPU revenue with Vera in 2026, as it capitalizes on the massive and rapid rise in demand for traditional CPU processors needed to orchestrate agentic AI workloads.
