On May 20 after market close, Nvidia — the AI leader with a market capitalization of US$5.46 trillion and an 8.6% weighting in the S&P 500 — will announce its fiscal 2027 first-quarter earnings results. According to reports, Wall Street consensus expectations are already extremely elevated: revenue is expected to reach approximately US$78.75 billion to US$79.12 billion, representing year-on-year growth of roughly 80%; earnings per share are projected at around US$1.75 to US$1.76, nearly doubling from US$0.96 in the same period last year.

In the week leading up to earnings, several major investment banks raised their Nvidia price targets. Bank of America increased its target from US$300 to US$320; Wells Fargo sharply raised its target from US$265 to US$315 while forecasting data center revenue could climb to US$628 billion by fiscal 2029; UBS raised its target from US$245 to US$275. Huatai Securities maintained its “Buy” rating and US$310 target price, emphasizing two key drivers: improving expectations for China exports and growing demand for low-latency inference chips driven by Agentic AI. Morgan Stanley maintained its “Overweight” rating while raising its target from US$260 to US$285. Wedbush maintained its “Outperform” rating and US$300 target price. The average analyst target currently stands at approximately US$272.54, implying roughly 15% upside from current levels, while the consensus rating remains “Strong Buy.”

However, one pattern from the past five quarters cannot be ignored: four earnings beats, four stock declines. In February this year, Nvidia exceeded consensus revenue expectations by 3.4%, yet the stock still plunged 5.5% the following day. The core reason is that buy-side expectations have consistently run far ahead of public sell-side consensus estimates. This quarter, the same gap appears once again. Some overseas analysts are reportedly expecting revenue as high as US$81 billion, with data center revenue projected between US$73 billion and US$74 billion. Nvidia no longer simply needs to beat expectations — it must beat them by a sufficiently large margin.

Four Core Themes Beyond the Earnings Numbers

Theme One: The Magnitude of the Beat Will Determine the Stock’s Direction

Since its March lows, Nvidia shares have surged approximately 36%, while the Philadelphia Semiconductor Index has gained more than 60% over the same period. Meanwhile, the S&P 500 has risen nearly 17% from its March lows. After such a powerful rally, expectations heading into earnings have already been heavily priced in. Options market implied volatility has climbed close to 7.5%, signaling that markets are preparing for sharp price swings. Among options expiring this Friday, the US$235 strike call option has accumulated premiums totaling approximately US$114 million. From a technical perspective, US$235 has now become a key resistance level.

Theme Two: Will Nvidia Revive Its China Business — Or Continue Losing Ground?

Nvidia CEO Jensen Huang recently accompanied President Trump during his visit to China earlier this month. However, Huang previously admitted that Nvidia’s market share in China had fallen from roughly 90% globally to nearly zero. Huatai Securities recently identified improving China export expectations as one of the core reasons behind its higher price target. Any comments during the earnings call regarding China market prospects are likely to directly impact market sentiment.

Theme Three: Competitors Are Closing In

Last Thursday, Cerebras completed its IPO, becoming the world’s largest IPO of 2026 so far, raising approximately US$5.55 billion. The stock surged as much as 108% intraday before closing up 68% on its first trading day. Although Nvidia still controls roughly 85% of the AI GPU market, Morgan Stanley’s latest report pointed out that the total cost of building a 1-gigawatt data center using Nvidia Blackwell GPUs is approximately double the cost of solutions based on Google TPUs or Amazon Trainium chips. Over the long term, cost-efficiency competition may become a growing challenge for Nvidia.

Theme Four: Tariff Risks

At the May G7 Summit, President Trump proposed raising semiconductor tariffs to as high as 50%. Wall Street analysts generally believe such a move could create substantial negative pressure for chipmakers including Nvidia. As a result, markets will closely monitor management’s comments regarding tariff risks during the earnings call.

How Could Nvidia’s Earnings Impact the Broader Market?

A strong earnings report combined with optimistic guidance would likely reinforce the broader AI investment narrative and support the semiconductor sector, which has rallied sharply alongside Nvidia in recent months, potentially providing a positive boost to the overall market.

Conversely, if guidance fails to exceed today’s already elevated expectations, markets could face another round of short-term selling pressure.

Overall, Nvidia’s first-quarter earnings are still highly likely to deliver strong headline numbers. There is little doubt that both revenue and EPS will significantly exceed last year’s levels. However, markets are no longer trading the absolute numbers — they are trading the magnitude of the surprise. Buy-side investors have already pushed private expectations well above public consensus estimates ahead of the earnings release. This means that even if Nvidia beats guidance, the stock could still pull back if the beat is not large enough.

Importantly, this marks the first earnings season in six quarters where Nvidia faces such a complicated combination of external variables simultaneously — China-US relations, rising competition following rival IPOs, higher interest rates, and growing tariff threats. This time, “simply beating expectations” may no longer be enough.