Nvidia Beat Q1 FY2027 by $2.6 Billion and Grew 85% — Why Is the Reaction Mixed and Is NVDA a Buy Now?

TradingKey - Nvidia Q1 FY2027: $81.62B revenue vs $79B est, $1.87 EPS vs $1.78, Data Centre $70B+, 78%+ margins. Guidance only modestly above consensus. NVDA at $223, Fib 0.382 support. Buy the reaction?

On May 20, Nvidia (NASDAQ: NVDA) delivered Q1 fiscal 2027 earnings that surpassed expectations across the board. Revenue reached $81.62 billion, edging past the $79 billion consensus estimate by $2.62 billion for an 85% annual gain. Adjusted EPS came in at $1.87 versus the $1.78 forecast. Data Center sales rocketed past $70 billion, and non-GAAP gross margins clocked in above 78%, blowing past the 74% lower bound analysts had hoped for. However, NVDA’s performance on May 21 was ambiguous. This wasn’t because the quarter flopped; rather, the stock fell because Nvidia’s forward outlook was merely slightly higher than the consensus rather than the huge number push most market participants were counting on.

Nvidia’s (NVDA) price at $223.46 is testing support at the 0.382 Fibonacci level at $220.50. Is this a buy on the dip or a signal that the easy ride is done?

Nvidia’s Q1 Was No Marginal Beat: A Massive Outperformance Across Every Major Metric

The Q1 numbers are not marginal beats, as it is a total outperformance. Revenue was $81.62 billion, an 85% YoY growth, and an addition of $2.62 billion over the then high consensus level of $79 billion. Blackwell supply is being absorbed faster as production ramps up with Data Center sales above $70 billion, proving hyperscaler and sovereign AI needs.

Non-GAAP gross margins above 78%, compared with the 74% floor consensus, are the critical number of the earnings report, because this number proves that initial Blackwell ramping up is not diluting margins as the bear crowd had priced in, with Adjusted EPS at $1.87 above $1.78.

During the earnings call, CEO Jensen Huang repeated that demand continues to be insatiable for hyperscalers, enterprise customers, sovereign AI, robotics, and autonomous systems. Blackwell yields come up quicker than anticipated, more hyperscalers pledged to huge deployments, and sovereign AI projects across Middle East and Asia will build a fresh demand tier on top of the hyperscaler cycle. Rubin will be the big performance and efficiency improvement that is coming in 2027. In a second announcement, Nvidia raised its dividend and maintained its repurchase. From an objective viewpoint, Q1 was a solid quarter.

The Post-Earnings Reaction Is All but the Guidance Gap, Not the Q1 Quarter

There is only one explanation why the post-earnings response was so divided: It was not a result of Q1 performance but the delta in future guidance.

Analysts had prepared for an aggressive forecast, the $85 billion to $90 billion and more guidance that would have forced many analyst models to upgrade and triggered a stock to open 10% to 15% higher. What Nvidia gave was something that only exceeded current expectations a bit.

The $2.5 trillion company, "only a little bit better than expected," is the relative badness even when the absolute numbers are great. Nvidia is the same Palantir issue: a forward 97 earnings ratio that can not deliver just a beat but a growing beat. If the guidance improvement is a bit, the stock is absorbing the news, not skyrocketing.

The true story here is the valuation issue. Several companies lifted the price target to more than $300 in the post-earnings. Others pointed out that the premium valuation leaves little margin for guidance that is on par with the exceptionally high expectations instead of significantly beating.

It's not a deterioration in fundamentals, 85% growth YoY with 78%+ gross margins and a fully-booked Blackwell platform, but is instead a classic high-expectation stock that gave great but not remarkable forward guidance, and the market is adjusting its near-term trading expectations.

NVDA Technicals Show the 0.382 Fib at $220.50 Is the Level to Watch

On the one-hour chart, NVDA at $223.46 tested the 0.382 level at $220.50, then bounced back and produced a perfect hammer candle, the channel midline and red MA dynamic support holding between $217 and $220, and the RSI is holding between 48 to 50, neutral with bullish divergence, as the sellers are exhausted and there is room for recovery.

Nvidia Price Chart - Source: Tradingview

Resistance is coming up at $226.52 to $230, then at $236.21 and $245.11. A break of $220.30 in a daily close is a clear invitation to the $215.62 (Fib 0.618) zone. The $195 base bull flag structure is fine as long as 0.382 does not break.

TRADE SETUP

Entry: Enter Long above $224.50, confirming that the hammer at the 0.382 level held.

Target 1: $226.52 to $230 — The area of channel resistance.

Target 2: $236.21 to $245.11 — The upper section of the channel.

Stop Loss: Daily close below $220.30, 0.382 level broken, next support at $215.62.

What Were Nvidia's Q1 Fy2027 Earnings Results? 

Nvidia posted Q1 FY2027 revenue of $81.62 billion, which was $2.62 billion higher than the $79 billion consensus and an 85% increase year-over-year. Data Center revenue surpassed $70 billion. Non-GAAP gross margins were higher than 78% compared to a 74% low estimate. On a non-GAAP basis, adjusted EPS was $1.87 compared to $1.78 consensus.

The company highlighted that Blackwell is ahead of expectations, sovereign AI is ramping faster than anticipated, and the 2027 Rubin architecture was discussed as "looking very nice." Nvidia also increased its dividend and is continuing buybacks.

Why Was Nvidia Stock Mixed After Crushing Earnings?

 It is the standard valuation story. Forward guidance only slightly exceeded the already very high consensus. Revenue and EPS beat significantly but, with a $2.5 trillion market cap trading at an elevated multiple, the expectation was for an elevated guidance raise, not just an above-consensus one. Nvidia is not a problem. The 85% year-over-year growth, 78%+ gross margins, and Blackwell sold-out platform remain intact.

Will NVDA Be Bought off the Post-Earnings Dip? 

The stock is forming a long setup at the 0.382 Fib level at $220.50, as a hammer candle closes on positive divergence with RSI. The long above $224.50 will take profit at $226.52 and $230, while the invalid level is below $220.30. The thesis is the same as always. 85% year-over-year growth, 78%+ gross margins, Blackwell sold out, Rubin in 2027.

A risk to the thesis is if the market takes longer to digest the "only slightly above consensus" nature of the guidance in the coming sessions, or if the earnings season for the hyperscalers continues to deliver soft guidance. Keep an eye on Microsoft, Meta, Google, and Amazon in the coming weeks for guidance commentary.

Bottom Line

Nvidia Q1 FY2027 results came in $2.6 billion above expectations with 85% year-over-year growth, 78%+ gross margins, and Blackwell ahead of plan. The reaction is about expectations because guidance was good, but not the aggressive hike that the Nvidia stock premium multiple requires. Currently at $223, NVDA retests the 0.382 Fib at $220.50 on a hammer candle and with RSI positive divergence. The move above $224.50 will take profit at $226.52 to $230.

The bull thesis is unchanged, namely Blackwell being sold out, Rubin coming in 2027, and the addition of sovereign AI as a new demand layer. Earnings commentary from Microsoft, Meta, Google, and Amazon on hyperscaler capex will be the next catalyst in the coming weeks.