Nvidia Preview: Numbers Are Going Up, and There Is Little They Can Say to Ease CY27 Growth Concerns

Gene Munster, Brian BakerMay 8, 2026

I believe we're still in the second inning of AI, and shares of NVDA will underperform the broader silicon trade over the next six months. Nvidia reports on May 20th, and expectations began to get amped up two months ago at the March GTC event, where Jensen projected the company would see at least $1T in cumulative data center revenue through CY27, which implies about 40% growth, vs. the Street currently at 32%. Since those March comments, NVDA is up 18%, vs. AMD up 129% and INTC up 183%. The issue is that investors know the April quarter will be strong and that numbers for CY26 will likely increase by 10%, but they struggle with the the law of large numbers resulting in slowing growth next year and the risk of custom silicon. Unfortunately for NVDA, the company likely won't be able to ease those fears on the April call.

Key Takeaways

Expect upside in April and a higher guide for July. CY26 Street revenue growth to increase following April's report from 78% y/y to 90%.

At the March GTC event, Jensen set a floor of $1T in cumulative data center revenue through 2027, which suggests revenue growth next year of 40%-plus, vs. the Street at 32%.

The call's most important secondary topics include gross margin resilience amid rising input costs, non-traditional demand from outside of the hyperscalers, and competition from custom silicon

Numbers Are Going Higher

For the April 2026 quarter (Q1 FY27), the Street is looking for 86% y/y growth, accelerating from 75% growth in January 2026.

For July, the Street is expecting growth of 94%, October 2026 growth of 73%, and January 2027 growth of 57%. This translates to a 78% growth expectation for the full FY27 (CY26). I believe all of these numbers are going up by about 10% following April earnings, which is in line with the whisper.

As mentioned, the Street is expecting CY26 revenue to grow at 78%. Following the April report, I expect that number to increase to 90%. While shares will get some credit for the increased outlook, I expect the percentage move in the stock to lag the percentage improvement in the growth outlook.

The Trillion-Dollar Wall of Worry

At the GTC keynote on March 16, Jensen updated the outlook through CY27. Huang projected that the company would see at least $1T in cumulative data center revenue through 2027. This is driven primary by Blackwell and Vera Rubin, and their to a lesser extent networking systems. Importantly, Jensen said that demand could push the final figure even higher.

While I was impressed by the update, shares of NVDA reaction was muted which underscored the NVDA growth wall of worry that started six months ago (shares up 8% vs. Nasdaq up 12%) is not going away. My sense is investors don’t believe the company can sustain a growth number in CY27 that is close to the CY26 expectation of 78%.

More specifically, investors question how the stock will react if growth slows from what will likely be 90% this year to 45% next year. Anticipation around that uncertainty has created a dynamic in which the company’s fundamentals continue to improve beyond even the highest expectations, yet the stock’s reaction remains muted.

What to Listen for: Gross Margins, Non-Traditional Buyers, and Custom Silicon

Beyond the headline revenue beat and raise, investors will focus on three topics:

Gross Margins in an Inflationary and Custom Silicon Environment: Given rising memory prices and input costs, the gross margin outlook will be a focus. The market will look for the company to reiterate its mid-70% gross margin guidance for CY2026, proving its pricing power remains solid even as it ramps the new Rubin platform in the second half of the year. If they guide below the mid-70%, investors will likely read that as concerning on pricing power. Above it will be read as bullish on the GPU’s competitive position relative to custom silicon.

Non-Hyperscaler Demand: Investors don’t believe the hyperscalers can carry the trade for much longer. I estimate about 50% of Nvidia demand comes from the big four, in line with the percentage in the January quarter. Investors will want to hear that the company is diversifying its customers to sovereign and industrial data center builds.

Custom Silicon: Google and Amazon’s recent comments on their earnings calls that they will be ramping sales of custom silicon to third parties resulted in shares of NVDA trading off by about 4% despite the outlook from the hyperscalers that spending would be 10% higher in CY26 compared to what they said three months ago. I expect Nvidia to counter this by highlighting that its annual product cadence, specifically the massive generation-to-generation cost improvement of Blackwell, continues to drive the lowest total cost of inference in the industry. While that message is not new, investors’ response to it will hinge on the gross margin guide. If the gross margin guide is favorable, above mid-70% for this year, investors will be relieved that custom silicon is not impacting demand for Nvidia GPUs.

Disclaimer