Nvidia (NVDA) Stock Slides in After-Hours Trading Despite Crushing Q1 Earnings Expectations

Key Highlights

• Nvidia exceeded Q1 earnings projections with adjusted EPS of $1.87 versus the Street’s $1.77 expectation, while revenue reached $81.6B against a forecast of $79.19B.
• The company’s Q2 revenue outlook of $91B significantly surpassed analyst predictions of $87.36B.
• Management authorized an $80B stock buyback initiative and dramatically increased its quarterly dividend from 1 cent to 25 cents per share.
• Jensen Huang, Nvidia’s CEO, introduced the “Vera” CPU platform, positioning it as an entry point into a $200B addressable market with projected sales of $20B by fiscal year-end.
• Shares declined approximately 1.6% during after-hours sessions as market participants assessed intensifying competition from proprietary chip development.

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Nvidia’s shares settled at $223.47 during Wednesday’s regular trading session ahead of its post-market earnings announcement. The stock retreated roughly 1.6% in after-hours activity despite delivering impressive financial results.

NVIDIA Corporation, NVDA

The chip giant recorded fiscal first-quarter revenue of $81.62B, surpassing the analyst consensus of $78.86B. Adjusted earnings per share reached $1.87, exceeding the Street’s $1.77 projection by ten cents.

The company’s data center segment generated $75.2B during the quarter, outpacing the $72.8B estimate. This division continues to serve as Nvidia’s primary growth driver.

For the current quarter, management issued guidance of $91B with a 2% variance in either direction, comfortably beating Wall Street’s $87.36B projection. The upper boundary suggests potential revenue approaching $92.8B.

The company unveiled an $80B share repurchase authorization while simultaneously raising its quarterly dividend payment from 1 cent to 25 cents—representing an extraordinary 2,400% increase.

Vera CPU Launch Targets Massive New Opportunity

During the earnings conference call, Jensen Huang highlighted Nvidia’s newly announced “Vera” central processing unit, describing it as an entry into a $200B total addressable market. The executive stated that Nvidia anticipates generating $20B in Vera-related revenue by the conclusion of the current fiscal year.

Importantly, this $20B projection was excluded from Nvidia’s previous $1 trillion revenue estimate that encompassed Blackwell and Rubin AI accelerators through 2027. Huang indicated that Vera is expected to emerge as the company’s second-largest revenue generator outside that trillion-dollar framework.

To address potential supply chain bottlenecks, Nvidia’s supply commitments expanded to $119B in Q1, marking an increase from the previous quarter’s $95.2B.

Rising Competitive Pressures

The after-hours price decline appears linked to mounting concerns among investors regarding custom chip development by Nvidia’s largest customers.

Alphabet, Amazon, and Microsoft are projected to allocate more than $700B toward AI infrastructure investments in 2025, representing a substantial increase from approximately $400B in 2024. A meaningful portion of these expenditures is directed toward proprietary semiconductor solutions aimed at decreasing dependence on Nvidia’s products.

Intel and AMD are simultaneously expanding their presence in the inference chip space, which is gaining prominence as artificial intelligence workloads transition from model training to deployment and execution.

Nvidia has responded proactively. Earlier in March, the company introduced a new central processing unit and AI system incorporating technology from Groq, a startup specializing in inference-optimized chips.

Huang highlighted an emerging subsector within the data center business—AI-focused cloud service providers—where revenue levels matched those from major hyperscale operators while demonstrating superior sequential growth. “We should be growing faster than hyperscale capex,” Huang remarked.

According to InvestingPro data, Nvidia has received 34 upward EPS revisions against just one downward revision over the past 90 days, with the platform assigning its financial health an “excellent performance” rating.

The stock has appreciated 17.73% during the previous three-month period and has gained 69.55% year-over-year.

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