SPECIAL EDITION
🥊 Nvidia Crushes Earnings, But Competition is Heating Up

📊 Last night Nvidia ($NVDA) reported earnings, so it’s time for our special edition Weekly Buzz breaking it down!

🫧 While AI bubble fears were riding high last quarter, this earnings season is quite the opposite:

• 🤑 According to the Fear & Greed index, the market is in a state of greed.

• 📈 The Nasdaq-100 is up 16% year-to-date and Nvidia is up 18%

• 💪 Big Tech earnings were strong, with Google soaring 12% in a week

• 🤖 Even Greg Abel, Buffett’s successor, was piling in the AI trade - tripling his position in Google

🏆 So Nvidia’s earnings were less the market ‘holding its breath’ and more the market hoping for another AI victory lap. With that in mind, let’s see if Nvidia delivered.

🥁 Drumroll please…

🚀 Nvidia Crushes Earnings (Again)

👏 To no one’s surprise, Nvidia managed to once again smash estimates.

• 💰 Revenue: $82B, up 85% from last year, and 3.5% higher than analysts expected

• 🎯 Forward Revenue Targets: $91B, 5% higher than analysts expected

• 💸 Earnings per Share: $1.87, 6% higher than analysts expected

🤯 AI-driven data center revenue now drives over 92% of Nvidia’s revenue, up from 60% just 3 years ago and just 38% 5 years ago.

🔗 It’s worth noting that Nvidia is still very dependent on the Big Tech spending spree continuing, with the ‘hyperscalers’ making up over 50% of all data center revenue.

💰 Spending continues to soar, on track for $725B across Amazon, Microsoft, Alphabet, and Meta. If this spending growth slows or stalls, this will directly impact Nvidia.

💬 But Jensen Huang, CEO of Nvidia, isn’t worried, saying:

📉 At the time of writing (before market open), the stock is down around -1%, but is still up 12% in the past month and 70% in the past year, so overall, I’d say a positive market reaction to earnings

✨ But outside of the numbers, let’s take a look at the biggest themes and takeaways from Nvidia’s earnings:

🔥 Competition Heats Up

😬 One of the most interesting new themes this quarter was the growth in Nvidia’s ‘frenemies,’ with Nvidia acknowledging that many of its own customers are becoming rivals as they develop custom chips tailored for their own use cases.

✨ A great example of this is Google ($GOOG), which has built its own TPUs (a type of ASIC) for specialized AI workloads (more on TPUs here), reducing Google’s reliance on Nvidia.

🤝 But it’s not just Google looking for alternatives to Nvidia’s expensive GPUs, in February, Meta signed a multi-billion-dollar deal to rent TPUs from Google, and on Tuesday, Google announced an AI infrastructure venture to ‘loosen Nvidia’s grip on the AI hardware market’ with a $5B investment from Blackstone.

👀 The market for these ASICs (Application-Specific Integrated Circuit), which can be 30-60% cheaper to operate and rent than commercial GPUs, continues to soar with Amazon, Microsoft, Google, and start-ups like SambaNova, D-Matrix, and Cerabras Systems (which recently had the biggest IPO of 2026) all competing in the space.

😬 Nvidia acknowledged this risk directly, saying:

🎯 The next theme is a more positive one: Nvidia’s goal to become the ‘world’s learning CPU supplier’. But before we dive deeper there, a quick word from today’s sponsor Harvest ETFs.

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NVIDIA EARNINGS CONT.
🏆 Nvidia Expects to be the ‘World’s Leading CPU Supplier’

🥊 While competition is heating up for Nvidia, Nvidia isn’t sitting on its hands and doing nothing.

🚀 A few weeks ago, I wrote about how AMD soared 26% as the AI trade shifts from GPUs to CPUs, and Nvidia wants a piece of that action.

⚙️ Unlike GPUs, which are used for training the models, CPUs are used to host and run AI applications once they’re built. And with the AI industry shifting from building AI models to deploying them, the need for CPUs is growing, driving huge growth in CPUs - a market dominated almost completely by Intel ($INTC) and AMD.

👀 Nvidia is seeing this shift too, and is making a focused push to become the ‘world’s leading CPU supplier’ with the company unveiling a new CPU-only product suite.

💰 Nvidia believes CPUs will be a major new growth driver, with the CFO estimating $20B in total CPU revenue in this year alone, saying that CPUs will “open a brand new $200B tab for Nvidia.”

🚗 Physical AI is the Next Wave

🦾 The final big theme of the quarter was physical AI. While not as big a focus in previous quarters, Jensen continues to point to Physical AI as the “next wave” of AI, saying that Nvidia’s CUDA software platform helps it extend into autonomous vehicles and robotics.

💬 In his closing statement, Jensen emphasized this as the future, saying:

🎯 What Analysts Have to Say

🤔 With Nvidia delivering another blowout quarter, analysts continue to be very bullish, with an average price target of $296, 32% above the current stock price.

✨ Goldman Sachs summed up the optimism, saying:

💬 Morgan Stanley went even further, saying:

📈 On the note of the growing competition from ASIC chips, BofA highlighted Nvidia's moat, pointing out that when it comes to AI factories and full-platform support, Nvidia has a "near-monopoly", areas where custom ASICs simply "cannot address."

👀 Morgan Stanley, while optimistic, acknowledged that the ‘competition debate’ is a real concern and the risk is ‘difficult to disprove’ but argues that investors are already “pricing in a significant probability that margin compression, market share loss, or a general slowdown in AI spending will prevent any meaningful long-term earnings growth.”

👏 Overall I’m walking away from the Q1 results more bullish than before. Capex spend from the tech giants continues to soar, Nvidia entering the CPU space is a big area of opportunity, and physical AI is still just ramping up.

⚠️ That said, competition is a real threat to keep an eye on and investor vibes around the massive AI spending from the hyperscalers (that Nvidia relies on) can shift rapidly so I’d describe my position as ‘cautiously bullish’.

🌼 But enough on my thoughts, I’m curious what you all think! Join the discussion and vote in my poll on Blossom 👇

😎 And that wraps up Nvidia earnings! Before we wrap up, a quick word from our other sponsor this week Guardian Capital (and a small reward for those who read to the end).

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