Nvidia Posts Record $81.6B Revenue; BofA Raises Target to $350
In brief
- Nvidia's Q1 revenue hit record $81.6 billion, up 85% YoY, with data center revenue at $75.2 billion.
- Nvidia beat consensus estimates by $2.5 billion, posting $1.87 adjusted EPS versus $1.73 expected.
- Bank of America raised price target to $350 and named Nvidia a top pick despite post-earnings stock decline.
The Numbers
Data center revenue alone hit $75.2 billion, up 92% year-over-year—the engine driving Nvidia's growth. Earnings per share came in at $1.87 on an adjusted basis, beating the $1.73 analysts expected. Gross margin held steady at 75%, a sign the company's pricing power remains intact even at scale.
Free cash flow for the quarter reached $48.6 billion. That's real cash—not accounting fiction. It reflects the velocity at which customers are moving capital to Nvidia for AI infrastructure.
The Demand Backdrop
Customer purchase commitments totaled $145 billion this quarter, up from $95 billion three months ago. The pace of commitments is accelerating, not slowing. AWS alone has committed to deploying around 1 million Nvidia GPUs through 2027.
Bank of America's thesis rests on market expansion, not just Nvidia's current dominance. The bank raised its estimate for the agentic CPU chips market from $125 billion to $200 billion and says Nvidia already has $20 billion in demand locked in for the second half of this fiscal year.
The Stock Disconnect
The chipmaker has declined after three of its last four earnings calls, even as the numbers keep getting bigger. It's a familiar pattern in mega-cap tech: the bar gets higher with each quarter, and the stock reprices on disappointment relative to an ever-rising consensus.
Nvidia now represents 8.3% of the entire S&P 500 index. About 78% of active fund managers already own it. There's limited room for new money to push the stock higher on positioning alone.
Bank of America's $350 target implies 56.6% upside from the post-earnings price of $223.47. The bank raised its price target from $320 to $350 and models Nvidia holding roughly 78% of the AI accelerator market. The call is straightforward: growth and dominance will compound, and the dip is temporary.