Nvidia (NVDA +1.30%) is arguably the most highly watched technology stock on the market. The company's graphics processing units (GPUs) have become the gold standard for artificial intelligence (AI), making it a bellwether of the AI boom.
As such, all eyes will be on Nvidia when the company reports the results of its fiscal 2027 first quarter (ended April 27) after the market close on Wednesday. Investors are keen to know what the stock will do in the aftermath of this crucial financial report, as it will provide insight into the ongoing adoption of AI. Furthermore, some want to know if now is a good time to buy the stock ahead of the company's earnings release. History offers a startling answer for investors who are asking the right question.
Let's review the company's recent results, expectations going into the report, and what history says about the future.
Image source: Getty Images.
Enviable results
For its fiscal 2026 fourth quarter (ended Jan. 25), Nvidia reported revenue of $68.1 billion, which soared 73% year over year and 20% sequentially. These strong sales drove robust earnings per share (EPS) of $1.76, which surged 98%.
The biggest contributor to the company's blowout results was the continuing adoption of AI, as revenue in its data center segment jumped 75%.
Nvidia expects its stellar growth to continue. For its fiscal 2027 first quarter, management is guiding for revenue of $78 billion, representing 77% year-over-year growth. Wall Street is equally bullish, with analysts' consensus estimates calling for revenue of $79.12 billion and adjusted EPS of $1.77, representing growth of 79% and 119%, respectively.
Existing customers, increasing demand
Amazon Web Services, Microsoft Azure, and Alphabet's Google Cloud -- the "Big Three" in cloud computing and among Nvidia's biggest customers -- have all announced plans to boost spending this year, with the vast majority earmarked to meet soaring AI demand. Furthermore, Meta Platforms has already announced plans to increase capex spending beyond its original expectations. The totals are telling:
- Amazon -- $200 billion
- Microsoft -- $190 billion
- Alphabet -- $185 billion
- Meta -- $135 billion
While competition from alternative semiconductors is certainly worth watching, it hasn't stunted Nvidia's results. Therefore, as the leading provider of AI-centric processors, Nvidia is well-positioned to capture a significant share of this spending, underscoring the vast opportunity that remains.
NASDAQ: NVDA
Key Data Points
Is the stock a buy before May 20?
Seasoned investors know that there's rarely a "perfect" time to buy a stock, and Nvidia is no exception. However, history offers a compelling answer to the question, "Should I buy Nvidia stock before earnings?" The answer, as with so many things, is, "It depends."
My colleague, Beth McKenna, has already done a deep dive into what happens with Nvidia stock the day after it reports its results, but I wanted to take a different approach. It turns out there's really good news for investors with a long-term investing time horizon.
I reviewed information going back 10 years, looking at Nvidia's stock price performance three months after its quarterly financial report, and the data is compelling. Investors who bought the stock just before earnings and held for at least three months had a 78% chance of the stock price being higher, with average gains during the period of 18%.
However, for investors who bought the stock and held for at least one year, the chances of a higher stock price increased to 83%, with average gains of 99%. To be clear, this included periods of significant volatility, including two occasions when Nvidia plunged more than 50%. That said, over the past 10 years, the stock has gained 20,480%, as of this writing. This underscores the benefits of buying stock in quality companies and holding for the long term. And there could be more to come.
Global management consulting firm McKinsey & Company estimates that infrastructure spending to support the data center build-out and AI boom will soar to $7 trillion by 2030. Despite increasing competition, Nvidia has a 92% share of the data center GPU market, according to IoT Analytics, so it will continue to benefit from this trend.
While it's unlikely Nvidia will deliver similar returns over the next 10 years, I am confident it will continue to beat the market over the long term. Despite this significant opportunity, the stock is selling for less than 27 times forward earnings, a bargain basement price for an industry leader driven by significant secular tailwinds.
