Key Takeaways
- Nvidia’s revenue jumped 71%, driven by continued AI infrastructure demand.
- Market valuation suggests investors expect Nvidia’s growth to slow soon.
- Strong guidance and data center growth continue to support Nvidia’s outlook.
Nvidia continues posting strong financial growth despite a relatively modest forward valuation, according to a Motley Fool analysis published Thursday. The chipmaker reported trailing 12-month Nvidia revenue of $253 billion, up 71% from a year earlier, while investors remain cautious about the company’s long-term growth prospects.
Nvidia reports strong revenue and profit growth
Nvidia’s trailing 12-month revenue reached approximately $253 billion, a 71% increase from the previous year, according to figures cited by The Motley Fool. Net income more than doubled to about $160 billion during the same period.
The company reported first-quarter fiscal 2027 Nvidia revenue of $81.6 billion, representing an 85% increase from a year earlier. Nvidia said its data center business, driven by demand for artificial intelligence infrastructure, generated $75.2 billion in revenue, up 92% year over year.
Nvidia also reported a gross margin of nearly 75%. Adjusted earnings per share rose 140% to $1.87 compared with the same quarter last year.
Chief Executive Officer Jensen Huang said demand for AI infrastructure continues to expand.
“The buildout of AI factories — the largest infrastructure expansion in human history — is accelerating at extraordinary speed,” Huang said in the company’s fiscal first-quarter earnings release.
Investors weigh valuation against future growth
Despite its recent performance, Nvidia’s soaring stock trades at about 21 times expected forward earnings, according to The Motley Fool. The analysis argues that such a valuation is more commonly associated with mature companies experiencing slower growth.
Shares were trading around $210 as of the analysis, below the previous 12-month high of $236.54.
The company forecast about $91 billion in Nvidia revenue for its fiscal second quarter, nearly double the $46.7 billion reported during the same period a year earlier. The Motley Fool noted that guidance reflects management’s expectations and is not a guarantee of future results.
Daniel Sparks, writing for The Motley Fool, argued that Nvidia’s recent financial performance does not support expectations of an immediate slowdown in growth. He wrote that quarterly revenue growth accelerated from 56% a year earlier to 85% in the latest reported quarter.
Analysts cite opportunities and risks
The Motley Fool analysis acknowledged that Nvidia faces risks despite its strong results. Semiconductor demand has historically been cyclical, and several major technology companies are developing their own AI chips, which could increase competition.
The analysis also noted that any slowdown in AI-related spending could affect Nvidia’s financial performance and stock price.
Still, Sparks argued that investors may be underestimating the company’s longer-term growth potential. He wrote that while revenue growth is expected to moderate eventually, current business performance suggests demand for AI infrastructure remains strong.
Nvidia also announced an increase in its quarterly dividend from $0.01 to $0.25 per share and authorized an $80 billion stock buyback program, signaling continued confidence in its cash generation, according to the report.
The Motley Fool article concluded that Nvidia’s current valuation reflects expectations that growth will slow significantly, while recent financial results and company guidance continue to indicate robust demand.
