Nvidia(US:NVDA) Huachuang Securities·2025-05-31 07:49Investment Rating - The report assigns a strong buy rating for NVIDIA, expecting it to outperform the benchmark index by over 20% in the next six months [36]. Core Insights - NVIDIA reported FY26Q1 revenue of $44.1 billion, a year-over-year increase of 69% and a quarter-over-quarter increase of 12%, significantly exceeding market expectations of $43.3 billion and company guidance of $43 billion ± 2% [3][7]. - The data center business continues to drive growth, with Q1 data center revenue reaching $39.1 billion, up 73% year-over-year and 10% quarter-over-quarter, with Blackwell contributing 70% of data center computing revenue [3][4]. - The company anticipates FY26Q2 revenue to be around $45 billion, considering an estimated loss of $8 billion in H20 revenue due to recent export control restrictions [5][8]. Revenue Breakdown - Data Center: FY26Q1 revenue reached a record high of $39.1 billion, with computing revenue at $34.2 billion (up 76% YoY) and networking revenue at $4.957 billion (up 56% YoY) [4]. - Gaming: FY26Q1 revenue was $3.763 billion, reflecting a 42% YoY increase and a 48% QoQ increase, driven by strong adoption of Blackwell architecture GPUs [4]. - Professional Visualization: FY26Q1 revenue was $509 million, showing a 19% YoY increase, with expectations for recovery in Q2 [4]. - Automotive and Robotics: FY26Q1 revenue was $567 million, up 72% YoY, driven by strong demand for autonomous driving and electric vehicles [4]. Profitability Metrics - The GAAP and non-GAAP gross margins for the quarter were 60.5% and 61.0%, respectively. Excluding a $4.5 billion expense, the non-GAAP gross margin would have reached 71.3% [3][7]. - GAAP and non-GAAP diluted earnings per share were $0.76 and $0.81, respectively. Adjusting for the $4.5 billion expense, the non-GAAP diluted EPS would have been $0.96 [3][7]. Future Outlook - The company aims to improve gross margins to the mid-70% range in the second half of the year, with FY26Q2 gross margin guidance set at 71.8% and 72.0% for GAAP and non-GAAP, respectively [5][8]. - NVIDIA is experiencing a significant increase in demand for AI applications, with expectations for AI spending to reach nearly $1 trillion in the coming years [12][17].