• Nvidia consistently outperforms Wall Street’s earnings expectations.
• Positive signals from key customers suggest strong demand for Nvidia’s GPUs.
• Robust demand for Blackwell could enhance Nvidia’s Q1 performance and strengthen its full-year outlook.

As Nvidia gears up to report earnings on the 28th of May, anticipation is building across the tech and investment world. After the share price pulled back 43% throughout January and April, Nvidia has staged a solid recovery since it bottomed on the 7th of April, and many investors are wondering if the upcoming earnings report will spark the next leg higher.

A History of Outperforming Expectations

Nvidia has earned a reputation for consistently beating earnings expectations. In each of the last four quarters, the company exceeded Wall Street’s estimates by at least 5%. This streak of positive surprises has helped fuel investor optimism. As well, changes in analysts’ estimates have been favourable in the lead-up to this report.

With Nvidia expected to post record quarterly revenue of $38.34 billion and net income of $21.1 billion, investor expectations are high, but arguably justified, given the trends in AI and Nvidia’s positioning.

Strong Demand Signals from Major Customers

One of the most encouraging indicators ahead of the earnings release is the robust demand for Nvidia’s products, particularly its high-performance AI chips. Several of Nvidia’s largest clients have publicly confirmed their aggressive investment in Nvidia’s technology.

Amazon Web Services, for instance, has accelerated its deployment of Nvidia GPUs, with CEO Andy Jassy stating that capacity is being consumed as fast as it is installed. Microsoft is expanding its data centres across the globe and expects AI capacity constraints to persist beyond June, indicating continued reliance on Nvidia hardware. Google Cloud is also ahead of the curve, offering customers early access to Nvidia’s B200 and GB200 Blackwell GPUs and planning further deployments of next-gen chips like the Vera Rubin series.

These statements from tech giants suggest that Nvidia’s AI chips remain in extremely high demand, a key factor that could support another quarter of record sales.

Blackwell GPU: The Fastest Ramp in Nvidia’s History

Nvidia’s new Blackwell architecture is already playing a transformative role. The company reported $11 billion in Blackwell-related revenue during its debut quarter, marking the fastest product ramp in its history.

With Blackwell Ultra scheduled for release in the second half of the year and Vera Rubin set to launch in 2026, Nvidia is strategically positioning itself to remain the leading force in the AI chip space. Investors will be watching closely for updates on the production scale, preorders, and revenue expectations tied to these new architectures.

Tariff Risks Could Weigh on Near-Term Sentiment

Despite the strong fundamentals and product momentum, Nvidia does face macroeconomic challenges. The reintroduction of U.S. tariffs on Chinese imports and ongoing export restrictions have clouded the near-term outlook. Although the company is proactively adapting by moving some manufacturing to the U.S. and exploring R&D operations in China that comply with export regulations, these measures may not fully offset policy-driven risks.

Nvidia is also taking a $5.5 billion charge related to the latest export restrictions, a figure already known to investors but still significant. If trade tensions escalate again, the resulting uncertainty could limit stock gains even if the company beats earnings estimates.

Long-Term Outlook Remains Bright

In the broader context, Nvidia’s long-term trajectory remains compelling. Its financial performance has been exceptional, with gross margins consistently above 70%, even during the costly launch of new architectures. Revenue growth continues at double- or triple-digit rates, and its dominance in AI hardware positions it as a foundational player in a sector expected to reach trillions in value by the end of the decade.

Importantly, Nvidia continues to trade at a reasonable valuation relative to forward earnings, especially after its recent dip. Despite trading at about 30 times forward earnings, this is still below previous peaks, suggesting there may be room for appreciation if earnings and guidance exceed expectations.

Source: TradingView

Conclusion:

For investors focused on the long term, Nvidia remains one of the most promising companies in the AI and semiconductor sectors. While short-term volatility is possible, especially if macroeconomic concerns or tariff issues dominate headlines, the company’s innovation, customer demand, and financial strength suggest its upward trajectory is far from over. A strong Q1 report and bullish forward guidance could serve as a fresh catalyst for the next leg of Nvidia’s growth story.

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