NVIDIA has forecast a staggering $91 billion in revenue for Q2 FY27, excluding China operations, significantly outpacing its Q1 performance. This projection is fueled by extraordinary growth in Data Center and Networking segments, underscoring the explosive demand for AI infrastructure.
The company’s strong financial metrics, including a 75% gross margin and substantial free cash flow, coupled with a new $80 billion share repurchase program, reinforce investor confidence in NVIDIA’s long-term AI dominance.
NVIDIA (NASDAQ:NVDA) has delivered a stunning forecast to investors, projecting revenue of $91.0 billion for the second quarter of fiscal 2027, with a margin of error of 2%. This guidance notably excludes any Data Center compute revenue from China. This projection significantly surpasses the $81.61 billion reported for the first quarter of fiscal 2027, which itself was an impressive 85.2% year-over-year increase and outperformed consensus estimates. For a company already achieving nearly a quarter-trillion dollars in trailing revenue, this guidance implies a sequential acceleration on a base that is monumental in scale.
Deep Dive into NVIDIA's Q1 Performance
Breaking down the Q1 results reveals the depth of NVIDIA's success. Data Center revenue reached $75.25 billion, marking a substantial 92% increase year-over-year. Within this segment, Data Center Networking revenue soared to $14.8 billion, a remarkable 199% surge, driven by tripling demand for InfiniBand, NVLink, and Spectrum-X technologies. The company's non-GAAP gross margin stood at a robust 75.0%, with net income climbing to $58.32 billion, a 210.63% rise. Crucially, free cash flow, a metric closely watched by the market, came in at $48.55 billion. NVIDIA has now exceeded consensus Earnings Per Share (EPS) estimates for four consecutive quarters, most recently reporting $1.87 against an expected $1.77.
The $91 billion Q2 guidance carries extra significance as it explicitly excludes Chinese Data Center compute revenue. NVIDIA reported shipping no H20 units to China in the quarter, a stark contrast to the $4.6 billion from the year-ago period. Any revenue generated from this market will represent upside beyond the current forecast. Supporting this optimistic outlook are stated supply-related commitments totaling $119.0 billion and multi-year cloud service commitments amounting to $30.0 billion.
Market's Nod to NVIDIA's Dominance
NVIDIA's stock (NVDA) closed at $194.83 on July 2, 2026. While shares experienced a slight dip of 0.46% over the past week and a more notable 12.46% over the past month, moving from $222.57 to its current level, the year-to-date performance remains positive at 4.59%. The one-year performance stands at an impressive 24.06%. On May 20, 2026, the day of the Q1 FY27 report, shares were trading at $221.54.
The Bull Case: Unstoppable AI Momentum
The bullish argument for NVIDIA is anchored in its ability to accelerate growth on an already massive revenue base. The company's Q1 revenue jump of 85.2% and the projected sequential increase in Q2 highlight this trend. The staggering 199% growth in networking underscores the expanding infrastructure beyond GPUs to the critical interconnect fabric. This expansion is supported by an exceptional gross margin of 75%, with Q2 guidance maintaining a similar range of 75% plus or minus 50 basis points, indicating strong pricing power as the Blackwell platform ramps up.
Furthermore, NVIDIA's capital return strategy has significantly influenced investor sentiment. The board's approval of an $80.0 billion share repurchase authorization in May 2026, in addition to $38.5 billion remaining from the previous program, with approximately $20.0 billion returned in Q1 alone, demonstrates a commitment to shareholder value. The quarterly dividend was also increased from $0.01 to $0.25 per share. Analyst consensus remains overwhelmingly positive, with a target price of $301.62, supported by 10 Strong Buy and 48 Buy ratings, against only 2 Hold and 1 Sell ratings. The forward P/E ratio stands at 23, compared to a trailing P/E of 30.
CEO Jensen Huang aptly described the current landscape on the earnings call: “The buildout of AI factories, the largest infrastructure expansion in human history, is accelerating at extraordinary speed.” He further emphasized, “Agentic AI has arrived, doing productive work, generating real value and scaling rapidly across companies and industries.” Partnerships forged or expanded in the quarter include collaborations with Google Cloud for Vera Rubin A5X instances, Marvell for NVLink Fusion, and major players in optics like Coherent, Corning, and Lumentum. The automotive sector sees expanded ties with Hyundai, Kia, Uber, BYD, Geely, and Nissan, alongside telecom collaborations with T-Mobile and Nokia on AI-RAN and 6G initiatives.
While the outlook is overwhelmingly positive, risks are present. The exclusion of China's Data Center compute revenue from Q2 guidance, an anticipated substantial increase in Q2 cash taxes, softer consumer PC demand, and reliance on third-party manufacturing introduce supply chain risks. However, these factors do not diminish the core strength of NVIDIA guiding to $91.0 billion in quarterly revenue, even with the exclusion of a key market.
The Verdict: AI Infrastructure Thesis Remains Intact
For long-term investors, the $91 billion Q2 guide solidifies the artificial intelligence infrastructure thesis with concrete data rather than mere narrative. The impressive 92% Data Center growth, 199% Networking growth, 75.0% gross margin, and the substantial $80.0 billion buyback authorization collectively paint a picture of a business compounding at an extraordinary scale while actively returning capital to shareholders.
The upcoming earnings report will be crucial in validating this guidance. Until then, the figures presented speak volumes about NVIDIA's commanding position in the AI revolution.
