ii view: Nvidia’s key role in biggest-ever infrastructure expansion

Nvidia CEO Jensen Huang at Computex in Taipei in June 2026. Photo: I-Hwa Cheng/AFP via Getty Images.

First-quarter results to 26 April

• Revenue up 85% year-over-year to $81.6 billion (£61 billion)
• Adjusted earnings up 140% to $1.87 per share
• Cash dividend increased to $0.25 per share from the previous quarter’s $0.01 per share
• Additional $80 billion share repurchase authorisation

Guidance:

• Expects second-quarter sales of around $91 billion versus last year’s $46.7 billion

Chief executive Jensen Huang said:

“The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed.

“Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries. Nvidia is uniquely positioned at the centre of this transformation as the only platform that runs in every cloud, powers every frontier and open source model, and scales everywhere AI is produced — from hyperscale data centres to the edge.”

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ii round-up:

Started in 1993 by current CEO Jensen Huang, NVIDIA Corp (NASDAQ:NVDA) today makes computer chips used across sectors such as datacentres, gaming, robotics and automotive computing.

Nvidia products used in data centres to process AI software generated most sales during this latest quarter at 92%. Chips used in other areas, and summarised by Nvidia as ‘Edge Computing’, accounted for the balance of 8%.

For a round-up of these latest results announced on 20 May, please click here.

ii view:

A constituent of the Nasdaq 100 and Dow Jones indexes, Nvidia credits its invention of the Graphics Processor Unit (GPU) in 1999 for fuelling the boom in the PC gaming market. Today, the wide use of the group’s computer chips and own supporting Cuda software in data centres globally leaves it describing itself as the world leader in accelerated computing.  

For investors, competition for powerful processing computer chips continues to increase, with major data centre operators such as Amazon.com Inc (NASDAQ:AMZN) and Alphabet Inc Class A (NASDAQ:GOOGL) also looking to provide their own chips. Sales of Nvidia products to potential military opponents of the USA, such as China, are likely to remain closely monitored and even curtailed by the US government. Power consumption concerns for the wider data centre industry sit alongside ongoing climate change concerns, while the worries of governments globally regarding the potential power of AI and its impact on human society continues to require deep thought.

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On the upside, demand for its data centre products continues to boom, now supported by its high-performance Blackwell chips as well as its emerging seven-chip supercomputer or Vera Rubin platform. A forecast price/earnings (PE) ratio comfortably below the three-and 10-year averages may suggest the emergence of value. Prospects for AI innovation including self-driving vehicles and potentially groundbreaking medicines cannot be ignored, while founder, Jensen Huang, with all his many years of experience, continues to lead Nvidia.

In all, valuing Nvidia, given its status as the eminent play on the future of AI, remains extremely difficult and leaves Nvidia shares highly volatile day-to-day. That said, sales momentum persists, and a consensus analyst fair value estimate close to $300 per share offers grounds for continued optimism.

Positives:

• Exposure to growth in data centres and AI
• Ongoing innovation with Vera Rubin platform

Negatives:

• Uncertain economic outlook
• US and China tensions

The average rating of stock market analysts:

Strong buy