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Call sheet · Q1'26

NVIDIA (NVDA)

Q1'26 earnings call · held May 28, 2025 · compared with the Q4'25 call · management-credibility review
10/12
Disclosure score
3 medium, 3 low flags
Financial quality
Bottom line
The sleeper story is NVLink switch hitting $1 billion run-rate - this is infrastructure lock-in at massive scale that nobody's modeling properly. Yes, China creates a $50 billion TAM headwind, but the underlying business delivered 71.3% margins and hyperscalers are deploying 72,000 Blackwell GPUs per week each. The binding constraint isn't demand (Jensen admits 'several many more years' of supply chain capacity needed) - it's manufacturing execution across 1.5 million components per rack. Most revealing quote: 'The platform that wins the AI developers wins AI... Export controls should strengthen US platforms, not drive half of the world's AI talent to rivals.' My view changes if enterprise AI revenue doesn't materialize in H2 or if China develops viable alternatives faster than expected US policy changes.

The 30-second version

  • The sleeper story: NVLink switch just hit $1 billion run-rate while nobody's paying attention
  • China write-off masks operational excellence - margins would've been 71.3% excluding H20 charge
  • Inference demand creating step-function compute requirements, but supply chain is the real constraint

What changed this quarter

MetricQ4'25Q1'26Change
Total Revenue$39.3B (+78% YoY)$44.0B (+69% YoY)Deceleration masked by H20 distortion
Data Center Revenue$35.6B (+93% YoY)$39.0B (+73% YoY)20 point YoY deceleration
Gaming Revenue$2.5B (-11% YoY)$3.8B (+42% YoY)Record quarter, massive reacceleration
Networking RevenueDeclined -3% sequentially$5.0B (+64% QoQ)Explosive sequential recovery
GAAP Gross Margin73.0%60.5%1250 bps collapse due to H20 write-off
Non-GAAP Gross Margin (adjusted)73.5%71.3% (ex-H20)220 bps decline but above guidance
Blackwell Revenue$11.0B (Q4)~70% of DC computeFastest ramp in company history
China DC Revenue %Well below pre-export levelsSlightly below expectationsSequential decline due to H20 ban
Operating Cash FlowNot disclosedNot disclosedSuspicious absence of disclosure
Share Repurchases$8.1B in Q4$14.3B76% increase, record quarter

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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