Nvidia no longer sees itself as just a graphics or AI-accelerator company. On its latest earnings call, the chip giant laid out an ambition to become the world’s leading CPU supplier, opening up a $200 billion addressable market long ruled by Intel and AMD. That strategic pivot — alongside a record $81.6 billion quarter — reveals a company in full transformation, even as its stock failed to rally.
A Quarter That Beat the Street
For the fiscal first quarter, Nvidia reported revenue of $81.6 billion, an 85% jump from a year ago and 20% higher than the prior quarter. That comfortably exceeded its own guidance of $78 billion. Adjusted earnings per share came in at $1.98, well clear of the $1.76 consensus estimate, while GAAP EPS reached $1.87, up 140% year over year.
The data center segment remained the powerhouse, contributing $75.2 billion — a 92% increase. Within that, networking revenue more than tripled and now accounts for roughly one-fifth of data center sales, as customers buy Nvidia’s full-stack AI factory approach rather than individual chips.
The company generated $50.3 billion in operating cash flow and $48.6 billion in free cash flow, reinforcing its ability to fund massive capital returns and new product development.
Looking ahead, Nvidia guided for second-quarter revenue of around $91 billion, comfortably above the Wall Street consensus of $87.3 billion.
The New Frontier: Vera CPUs
The most striking development on the earnings call was the announcement that Nvidia is targeting the CPU market with its Vera processor, already shipping to Anthropic, OpenAI, SpaceXAI and Oracle Cloud Infrastructure. CFO Colette Kress outlined a goal to become the world’s leading CPU provider, tapping a $200 billion market.
CEO Jensen Huang described demand for AI infrastructure as “parabolic,” adding that “agentic AI” — autonomous systems capable of independent action — has become reality. He noted that the upcoming Vera-Rubin architecture is on track for delivery in the second half of 2026, but acknowledged that supply constraints persist as demand for cutting-edge chips outpaces production. The company expects cumulative AI investment to reach $1 trillion by the end of 2027.
Analysts are projecting around $20 billion in CPU revenue for Nvidia next year, a modest figure compared with the total, but a clear signal of diversification beyond GPUs.
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Restructuring Reflects a New Focus
Nvidia quietly reshuffled its reporting segments, merging traditional gaming and RTX Pro into a new “Edge Computing” category, which generated $6.4 billion in the quarter. The move underscores a deliberate shift away from consumer hardware and deeper into AI infrastructure.
The geographic picture also changed. Due to strict export controls, revenue from high-end Hopper chips sold to China fell to zero. However, the gap is being filled by so-called “sovereign AI” projects, which are expected to contribute more than $30 billion this fiscal year, and by hyperscaler cloud providers, whose spending rose 115%.
Kawasaki Partnership Opens Robotics Front
Alongside the earnings report, Kawasaki Heavy Industries opened a new center in San Jose with Nvidia, Microsoft, Analog Devices and Fujitsu. The collaboration will integrate Nvidia’s simulation technology into Kawasaki’s robotics lineup, initially targeting health and mobility applications, including the four-legged Corleo robot aimed at the consumer market.
Kawasaki shares surged as much as 12% on the news, their biggest single-day gain since February. For Nvidia, the partnership advances its physical AI strategy, which it has been pushing at trade conferences and through platform expansions.
Market Reaction and Capital Deployment
Despite the record numbers, Nvidia’s stock fell 1.8% on the Thursday after the release, closing at €187.52 before recovering slightly to €190.34 on Friday — still about 5% below the 52-week high of €201.05. Analysts attributed the lukewarm response to extremely high expectations and a challenging macro environment, with 10-year Treasury yields at 4.62%.
The company used its cash pile aggressively, announcing an additional $80 billion in share repurchase authorization, bringing the total to roughly $120 billion. The quarterly dividend was raised to $0.25 per share.
Sixty-one analysts rate Nvidia a “Strong Buy” with a median price target of $291. Among the most bullish, Baird set a target of $500, while RBC Capital raised its to $270. Bank of America lifted its target to $350, and Morningstar sees fair value at $280. Wedbush’s Dan Ives said Nvidia “remains well-positioned at the top of the AI mountain as infrastructure buildout accelerates.”
Year to date, the stock is up about 16%. With a CPU ambition that targets a $200 billion prize, a robotics partnership, and an $81.6 billion quarter, Nvidia is making a clear case that its future extends well beyond graphics chips — even if the market hasn’t fully priced that in yet.
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