By Daniel Sparks
Publication Date: 2026-05-28 03:41:00
Shares of artificial intelligence (AI) chipmaker Nvidia (NVDA 0.99%) have struggled lately. The stock closed at about $213 on Wednesday, down about 6% over the past week and off about 10% from an all-time high of $236.54 earlier this month.
That weakness comes despite a fiscal first-quarter report on May 20 that, by almost any measure, was outstanding. Revenue rose 85% year over year to a record $81.6 billion. Data center revenue climbed 92% to $75.2 billion. And management raised the quarterly dividend from $0.01 per share to $0.25 per share while authorizing an additional $80 billion in share repurchases.
So, what is going on?
Image source: Getty Images.
The quarter itself was exceptional
Nvidia’s fiscal first quarter of 2027 (the period ended April 26, 2026) really was something.
The headline 85% revenue growth marked a sharp acceleration from 73% growth in fiscal Q4 — and the chipmaker’s profit trajectory was equally striking. Non-GAAP (adjusted) earnings per share of $1.87 rose 140% year over year, and free cash flow climbed to $49 billion in the quarter alone.
And underpinning this business momentum was relentless data center demand, with hyperscalers accounting for roughly half of data center revenue — and the rest from a widening mix of AI cloud and enterprise customers, alongside a fast-growing sovereign AI vertical. Data center networking revenue alone nearly tripled year over year to about $15 billion.
Even more, management expects even stronger growth…
