NVDA Q2 Guidance of $91B Tops Consensus by $5B-7B, Cementing AI Capex Cycle

NVIDIA's earnings release last week reassured the market that AI capex is not peaking despite months of speculation. The company delivered $81.6B in Q1 revenue, beating expectations of $79.2B, with earnings per share reaching $1.87 versus an expected $1.78. Most critically, management guided $91B for Q2, well above consensus estimates of $84-86B, signaling continued acceleration in data center spending.

The breadth of demand across hyperscalers remains the narrative anchor. Last quarter every major cloud provider raised AI capex targets: Microsoft, Google, Meta, and Amazon all signaled increased infrastructure spending. NVIDIA's Blackwell GPU already commands extraordinary lead times, and the company announced a fresh $80B buybackA company repurchasing its own shares from the open market. program alongside dividend hikes, suggesting management conviction in sustained demand.

The wildcard is China. NVIDIA's guidanceCompany-issued forecasts of future financial performance. explicitly excludes any contribution from data center compute in China, cementing a structural headwind tied to export controls. This means the $91B figure is essentially a floor assuming zero China uplift. For US and allied markets, the implication is that AI infrastructure buildout remains in early innings, with multi-year spending cycles intact.

Skeptics point to valuation risk: NVIDIA now accounts for over 40% of S&P 500 gains year-to-date, and mega-cap concentration has pushed the top five stocks to nearly 38% of index weight. A rotation into semiconductors like AMD and ARM signals some investor appetite for differentiation, though both lag NVIDIA in execution. The near-term risk is that forward guidanceCompany-issued forecasts of future financial performance., while strong, assumes a continuation of today's capex intensity.