NVIDIA Q1 $81.6B: Vera Rubin Ramping, Financing $500B AI Fund, $91B Q2 Guidance — August 26 Earnings Test

NVIDIA had record breaking fiscal Q1 with a 20% sequential revenue growth at $81.6B, and an 85% YoY revenue growth. Data Center segment revenue exceeded all records at $75.25B growing 92% YoY and 21% sequentially. The segment continues balancing growth: Hyperscale customers accounted for $37.87B, whereas AI cloud, industrial and enterprise customers contributed $37.38B. Hyperscale customers continue to dominate the segment accounting for around 50% of revenue, while revenue from other segments such as enterprise customers, cloud providers and sovereign AI projects continue to grow.

Rapid growth was fueled by the ongoing Blackwell 300 ramp along with high demand for Spectrum-X Ethernet, InfiniBand and NVLink. Data Center networking revenue grew 199% year over year to $14.8B. The networking segment has become almost as important as the GPU segment.

Q2 Guidance $91B ±2%: No China Compute Assumed — Upside if Restrictions Ease

For fiscal Q2, NVIDIA provided guidance for revenue in the range of $91B +/- 2%. Management has presumed no Data Center compute revenue from China. Therefore, guidance was truly constructed with no meaningful reliance on a China recovery. Recovery of the China market with the previously granted export licenses to ship H200 processors to a select few customers would count as upside.

Management expects GAAP gross margins to be around 74.9% and non-GAAP gross margins to be around 75.0% for the second fiscal quarter. Maintaining these margins with the Blackwell ramps and Rubin production would prove NVIDIA’s pricing power as well as its operating leverage.

Vera Rubin Production Underway: Foxconn Confirms Q4 2026 Shipment Ramp

Full-scale production for Vera Rubin has begun. NVIDIA describes Vera Rubin as the next milestone in their line of rack-scale AI architectures. This design integrates GPU, networking, storage, and other components with the Vera CPU to create a unified system for computationally intensive tasks involving agentic-AI. On August 12, Foxconn, NVIDIA’s largest AI-server manufacturing partner, informed clients that the shipments of server racks for Vera Rubin are scheduled to begin in Q4 of 2026 and are projected to become a major product offering in 2027.

Foxconn’s Q2 report indicated that cloud and networking products account for 51% of their total revenues, surpassing this mark for the first time. However, Foxconn noted that TSMC’s CoWoS is a key constraint for their next-generation AI Racks, and is a key capacity limitation for the shipping of next-generation AI Racks.

The most notable recent development is that NVIDIA has entered the financing business. In partnership with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR, NVIDIA intends to launch financing platforms that will raise over $500 billion of third-party financing towards AI infrastructure. NVIDIA has the option to backstop $125 billion of that financing. The rationale is that AI chips cannot generate revenue without data centers and financing.

This became more apparent on August 17 when NVIDIA agreed to guarantees of up to $105B to support OpenAI’s lease of SB Energy/SoftBank’s 20-year project for an Ohio data-center spanning 8 gigawatts (gigawatts). With a $1.5B investment, NVIDIA will become SB Energy’s sole supplier of chips and an investor. Jensen Huang estimates the Ohio data-center project will bring in at least $200B for NVIDIA, and the overall partnership with OpenAI will bring as much as $600B by 2030, should the projected goals be achieved (company estimates, not guaranteed).

Cash Generation Enables Financial Flexibility: $50.3B Operating Cash Flow, Q1

NVIDIA has greater financial flexibility than almost any other company due to its balance sheet. NVIDIA ended fiscal Q1 with $50.3B in cash equivalents, cash, and marketable debt. For the quarter, NVIDIA record operating cash flow of $50.3B. NVIDIA shared with its investors $20B through dividends and buybacks, approved another $80B share buyback, and increased its dividends from $.01 to $.25.

While NVIDIA increased manufacturing commitments during the quarter, inventory levels were at $25.8B with total supply related commitments at $119B. NVIDIA has the financial flexibility to ensure manufacturing capacity for future expected demand, as well as take on potential risk from customers, OpenAI, and even Chinese licensing risk.

On the 4-hour chart, NVDA is experiencing a short term pullback after failing to break above $225-$226. Now the stock is testing $221.01 (127.2% Fibonacci extension). Taking $221 raises the potential of $229.51 (critical). Breaking above $229.51 opens $234.51 and $238.89 (200% extension).

NVDA Price Chart - Source: Tradingview

Momentum is less bullish. RSI has dropped to 54, below 63 (signal), showing a decline in the recent bullish interest. However, RSI is still above neutral 50 and therefore, the pullback is still neutral. Key support is at $214.41 and below that is the 50-EMA at $213.81 and 100-EMA at $209.88, providing overall support.

Key Technical Levels & Earnings Watchlist (Into August 26 Earnings): 

Immediate resistance is at $221.01 (127.2% Fib, retest zone) with $229.51 (critical) and $234.51 and $238.89 (200% Fib) as next zones. Support is at $214.41 (key) and at $213.81 (50-EMA) and $209.88 (100-EMA). Overall, the downward momentum is still neutral, as the RSI is at 54, below 63 (signal), but above neutral 50. 

Key items to watch for the August 26 earnings are:

Blackwell growth (Sequoia ramp pace and customer mix), Rubin timing (Foxconn Q4 production confirmation or delays), networking momentum (sustainability of $14.8B, +199%), gross margin maintenance at 74.9%+ amid transition, updates from China regarding H200/Vera CPU progress, and if FY2027 guidance is provided to see if management is more bullish and expecting 2H acceleration.

NVIDIA Q1: Revenue hit an impressive $81.6B with a YoY growth of 85%, and the Data Centeroya $75.25B (92%), while Networkingoya $14.8B (199%). Q2 estimation is $91B (+/- 2%). No assumption of China. Vera Rubin is in production (Foxconn Q4 Ramp). NEW: Financing a $500B AI Fund and a $105B OpenAI Guarantee. The balance sheet shows strength featuring an operating cash flow of $50.3B and a cash balance of $50.3B.

Technical: NVIDIA ($219.80) is retesting $221 after a failed attempt to break $225-226. Signal is at 54, cooling off RSI and remaining below, but above neutral. constructive structure from broard perspective. jackson hole (August 21-22) conference will determine capital expenditure and market confidence before August 26 earnings.

For Investors: NVIDIA’s current position as a financing builder of the AI infrastructure creates a new business model and new risks. Post August 26 earnings may provide insight on the new orders as customers are either speeding up or slowing down purchases. Current estimates would place targets between $229-238, but if a cautious position is taken, a drop below the $214 technical support may occur. While this is an analysis, not an advice piece, the risks from the new model needs to be considered.