Nvidia has become a highly successful investment for shareholders, with its graphics processing units (GPUs) taking a 95% share of the gaming market. The company has also adapted its technology for various fields, including cryptocurrency, autonomous driving, robotics, and artificial intelligence (AI).
Nvidia’s entry into AI has boosted its stock significantly, increasing by 1,330% since early 2023. This growth has driven the company’s market value to $5 trillion, making it the most valuable company globally. It reported record revenue of $81.6 billion for the first quarter of fiscal 2027, an 85% increase compared to the previous year. The gross profit margin is solid at 74.9%, and earnings per share surged 140% to $1.87.
Nvidia’s data centre revenue, largely driven by its AI chips, has also seen remarkable growth, rising 92% year over year. Management expects this growth to continue, projecting a 95% revenue increase for the second quarter.
With substantial cash flow, Nvidia has invested over $40 billion in AI start-ups and plans to significantly increase shareholder returns. The company raised its dividend from $0.01 to $0.25 per share. Nvidia’s CEO announced that the company aims to return 50% or more of its free cash flow to shareholders each year, suggesting up to $110 billion over the next two years. This could enhance shareholder value through buybacks or increased dividends.
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