Nvidia's Next Earnings Report on May 20 Could Send the Stock Soaring. Here's Why.

As the largest company in the world by market capitalization, Nvidia (NASDAQ: NVDA) gets more than its fair share of attention. And now that the company's preparing to issue its fiscal 2027 first-quarter earnings statement after the market closes on May 20, Wall Street is bracing for what could be a market-moving report.

Nvidia has a history of beating analysts' sky-high expectations. Here's what to expect when Nvidia steps to the earnings podium on Wednesday.

Nvidia has already set the tone

Nvidia has become a powerhouse on the strength of its graphics processing units (GPUs), which have become the gold standard for developers who are looking to design, train, and run artificial intelligence-based applications. Nvidia's GPUs power data centers worldwide, enabling generative AI, machine learning, and other complex computing tasks.

Image source: The Motley Fool.

For the 2026 fiscal year, which ended Jan. 25, Nvidia reported a whopping $215.93 billion in revenue, up 65% from 2025. The company's gross margin is an incredible 71.1%, resulting in net income of $120.06 billion for the year. Earnings per share of $4.90 were up 67% from the 2025 fiscal year.

Nvidia forecasted FY 2027 first-quarter revenue of $78 billion, which would be a 76.8% increase from a year ago.So, in other words, the money will keep rolling in. The consensus estimate for Nvidia stock from analysts at Yahoo! Finance projects that the company will do even better, with revenue of $79.17 billion, up 79.6% year over year.

And that's all the more impressive considering that Nvidia is still effectively shut off from making sales in China. China was a major customer for Nvidia GPUs, accounting for $17.1 billion in sales as recently as 2024. Nvidia had sold the H20 chip, which was a downgraded version of its Hopper H100 chip, to China until April 2025, when new export rules blocked sales.

Since then, Washington and Beijing have gone back and forth on Nvidia's chips -- CEO Jensen Huang announced at one point last year that Nvidia could resume sales, with 15% of the revenue going to the U.S. Treasury, but the sales never materialized.

The Commerce Department has approved Nvidia sales of advanced H200 chips to 10 Chinese firms. But even after Huang accompanied President Donald Trump and other executives to Beijing for two days of trade talks, Beijing continues to block the sales as Chinese regulators encourage companies in that country to use domestic alternatives.

The catalysts that will send Nvidia stock soaring

Nvidia makes the vast majority of its money from data center sales. In the fourth quarter of fiscal 2026, data center revenue was $62.3 billion, or about 91% of Nvidia's total revenue for the quarter.

The nation's biggest hyperscalers -- Amazon, Alphabet, Meta Platforms, and Microsoft -- shocked Wall Street in February when they announced plans to spend as much as $700 billion this year alone on capital expenditures to build out their AI platforms. So, there was understandable trepidation in recent weeks when those companies reported quarterly earnings that capex spending would slow.

The opposite happened, however. Analysts at BNP Paribas noted that top AI hyperscalers have increased their guidance following first-quarter earnings, and are now expecting to spend $725 billion on capex -- nearly double the rate of spending from mid-2025. That kind of spending makes Nvidia's most optimistic projections seem possible. Huang said at the Nvidia GTC 2026 conference that Nvidia could bring in as much as $1 trillion in revenue by 2027 calendar year.

On top of that, Nvidia continues to find new partners and capitalize on its momentum. Its most recent announcement is a partnership with Iren to invest up to $2.1 billion in the company -- up to 30 million shares of Iren stock -- as Iren buys Nvidia AI infrastructure to support up to 5 gigawatts of computing power.

Don't underestimate Nvidia this quarter

Here's one thing about Nvidia -- it has a history of beating analysts' expectations.

Source: Yahoo! Finance

Analysts are expecting Nvidia to report EPS of $1.78 on May 20, up from $0.81 a year ago. I'm looking for yet another earnings beat and strong guidance as hyperscalers increase their reliance on Nvidia's chips.

Nvidia stock is currently trading 5% off its all-time high, but I predict it will set several new highs in the coming weeks. Nvidia remains a strong buy.

Patrick Sanders has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.