NVIDIA's Q1 Earnings on May 28 Could Ignite a New Bull Run: Here's Why
9min read NVIDIA’s stock (NASDAQ: NVDA) has become synonymous with the AI revolution, but its next major catalyst arrives on May 28, 2025, when the company reports its first-quarter fiscal 2026 (Q1 FY2026) earnings. Analysts and investors are watching this event closely, as it could provide the spark for a dramatic rally in the stock. Here’s why the earnings report matters—and what to watch for.
Ask Aime: "Is NVIDIA's earnings report set to ignite a stock market rally?"
The Case for a Skyrocketing Stock: Key Drivers
The May 28 earnings release centers on NVIDIA’s Q1 performance, which spans April to June 2025. Management has already issued guidance for $43.0 billion ±2% in revenue, with non-GAAP gross margins expected at 71.0%. These figures are not just impressive—they’re historic. To put this in perspective, NVIDIA’s data center revenue alone hit $35.6 billion in Q4 FY2025, up 93% year-over-year, driven by surging demand for AI infrastructure. If Q1 results beat or meet expectations, it would further validate the company’s dominance in AI’s golden age.
1. AI Growth: The Engine of Future Profits
The AI boom is NVIDIA’s tailwind, and Q1’s results will offer the latest read on its momentum. The company’s data center segment, which includes sales of its GPUs and AI software, now accounts for over 80% of its total revenue. Analysts expect this segment to continue growing as enterprises and cloud providers invest in AI training and inference infrastructure. A revenue beat in Q1 could signal that demand remains robust, even as competitors like Intel and AMD ramp up their AI offerings.
2. Gross Margins: A Test of Operational Excellence
NVIDIA’s gross margin guidance of 71.0% is critical. The company has managed to maintain high margins despite rising supply chain costs and increased competition, thanks to its leadership in advanced semiconductor design and its vertically integrated software stack. If margins hold or improve, it would reinforce NVIDIA’s ability to scale profits even as it invests in R&D for next-generation architectures like Blackwell (its AI superchip) and Stargate (a custom interconnect for AI clusters). Conversely, a margin miss could raise concerns about pricing pressure or supply chain bottlenecks.
Ask Aime: Will NVIDIA's Q1 FY2026 earnings report on May 28, 2025, catalyze a dramatic stock rally?
3. The Stargate and Blackwell Advantage
NVIDIA’s upcoming hardware innovations are another wildcard. The Blackwell architecture, slated for release in 2025, promises to deliver a 10x boost in AI performance over its predecessors, while the Stargate project aims to create a custom silicon interconnect to link thousands of GPUs in data centers. If management provides updates on these projects during the earnings call, it could ignite investor optimism about NVIDIA’s long-term moat in AI infrastructure.
4. Dividend Stability and Financial Health
While the May 28 event focuses on earnings, NVIDIA’s financial discipline is also a plus. The company has maintained a consistent quarterly dividend of $0.01 per share since June 2024, signaling confidence in its cash flow. With $30.6 billion in cash and equivalents as of Q4 FY2025, NVIDIA has the flexibility to acquire startups, invest in R&D, or repurchase shares—all of which could support future growth.
What Could Go Wrong?
Risks remain. Competitors like AMD’s MI300X and Intel’s Ponte Vecchio are closing the gap in AI performance, and the market for generative AI chips could become oversupplied if demand slows. Additionally, macroeconomic headwinds or geopolitical tensions—such as export controls on advanced chips—might constrain sales in key regions like China.
Market Context: NVIDIA’s Stock Performance
NVIDIA’s stock has been volatile, rising nearly 50% in 2024 on AI hype before retreating in early 2025 as investors digested mixed guidance from cloud providers. A strong Q1 report could reignite this momentum, especially if it confirms that AI adoption is not a temporary fad but a structural shift.
Conclusion: A Make-or-Break Moment for Bulls
NVIDIA’s May 28 earnings are a pivotal test of its AI thesis. With $43 billion in revenue guidance and a 71% gross margin target, the company has set a high bar—but one it has consistently cleared. A beat on either metric would likely propel the stock higher, especially if management provides clarity on Stargate’s progress and Blackwell’s timeline.
Consider this: NVIDIA’s data center revenue grew 93% YoY in Q4 FY2025 despite macroeconomic headwinds. If that pace continues, the company could hit $150 billion in annual revenue by 2026, a level that would solidify its status as the world’s leading AI infrastructure provider.
Investors should also note that NVIDIA’s valuation—while elevated at 27x forward P/E—is justified if its AI-driven growth trajectory holds. A positive earnings surprise on May 28 could finally convince skeptics that NVIDIA isn’t just a cyclical chip stock but a decade-long winner in the AI economy. For now, the market is waiting for proof—set to arrive on May 28.
