As NVIDIA prepares to release its Q1 FY2027 earnings on May 20th, analysts from Seeking Alpha note that the AI chip giant's core business drivers remain robust, even amidst high expectations.
Demand continues to outpace supply, with the data center segment remaining the primary growth engine. Analysts believe the current tight supply-demand dynamic for AI computing infrastructure is expected to persist through 2027. NVIDIA's data center business, its core growth driver, is projected to benefit significantly from the strong ramp of its Blackwell series chips. Citigroup forecasts Q1 revenue to reach $80 billion, approximately $1.4 billion above the market consensus, largely attributed to better-than-expected production scaling of the B300 chip.
Multiple positive factors support the optimistic earnings outlook. Wall Street widely anticipates NVIDIA will once again deliver results that exceed expectations and raise guidance. RBC Capital points out that NVIDIA's revenue has averaged 3% above market forecasts over the past three quarters. Wells Fargo analysts have constructed a new model driven by gigawatt capacity, predicting data center revenue for FY2027 to reach $354.5 billion and subsequently raising their price target to $315.
Despite the strong fundamentals, analysts also advise investors to monitor gross margin levels and the delivery timeline for the next-generation Rubin platform. Currently, NVIDIA's valuation remains attractive relative to its growth prospects. With major cloud service providers committing to over $700 billion in capital expenditures by 2026, NVIDIA's position as a core supplier of computing infrastructure is expected to be further solidified.
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