When a company is already the most valuable in the world, it takes a lot to surprise someone. But NVIDIA(NASDAQ: NVDA) CEO Jensen Huang managed to do it last week, and he did it with a single word.
Closing out the chipmaker’s fiscal first-quarter earnings conference call, Huang allayed any concerns about the demand environment.
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“Demand has gone parabolic,” he said. The reason, in his telling, was simple: Agent AI—systems that can reason, plan, and perform tasks on their own rather than simply responding to a prompt—had finally arrived and started doing real work.
It’s a loaded word. A parabolic curve doesn’t simply increase; it bends more sharply as it rises. And along with what Nvidia actually reported, “parabolic” may end up being one of the most important descriptors of the AI ​​cycle this year.
The question it leaves in the air is one that investors keep coming back to: are we near the peak of this development or in the middle?
Based on Huang’s description, as well as the continued acceleration of Nvidia’s business, there is probably still a lot of room to cover.
Image source: Getty Images.
A quarter that supports the word.
The numbers gave strength to Huang’s word.
Revenue in Nvidia’s fiscal first quarter of 2027 (the period ending April 26, 2026) reached $81.6 billion, up 85% year-over-year. That number matters less in isolation than in motion: Revenue growth had slowed for much of the previous year, then turned around and accelerated again. Growth was 73% in the previous quarter and 85% in the most recent.
The main driver, of course, remains Nvidia’s AI-powered data center business, where revenue increased 92% year over year to $75.2 billion, an acceleration from 75% growth in the previous quarter.
Earnings growth was truly parabolic. The chipmaker’s non-GAAP (adjusted) earnings per share rose 140% year over year to $1.87, helped by both surging revenue growth and year-over-year gross margin expansion.
Then there was Nvidia’s capital return, which marked an aggressive step up. Nvidia raised its quarterly dividend from a token $0.01 per share to $0.25 (a 25-fold increase) and authorized another $80 billion in share buybacks on top of the roughly $39 billion it had left. In fact, the company returned about $20 billion to shareholders during the quarter alone, against free cash flow that approached $49 billion.
The bet behind the buyback
And it looks like this parabolic momentum is going to continue.
Management reiterated its view that Blackwell and the upcoming Vera Rubin platform together represent about $1 trillion in revenue visibility from 2025 through calendar 2027. To achieve this, Nvidia is committing huge sums ahead of orders: Total supply commitments, including inventory and prepaid purchases, rose to about $145 billion, and inventory alone rose to $25.8 billion from $21.4 billion in just three months.
Additionally, CFO Colette Kress added a smaller but telling detail on the call: The rental price of an older H100 chip in the cloud has increased about 20% so far this year.
Given this context, it may not be surprising to hear that Nvidia’s guidance calls for revenue in the current quarter to increase approximately 95% year over year, and this assumes no data center computing revenue from China.
Ultimately, Nvidia has advanced tens of billions in commitments in the belief that this is much more like mid-construction, not peak. If that reading is correct, the current price (with shares near $217 at the time of writing, far from an all-time high set in early May and trading at a price-to-earnings ratio of around 33) may look reasonable in retrospect.
But there are risks. If hyperscalers digest their spending and pull back just as supply arrives, the curve could bend in the other direction. Additionally, some of Nvidia’s largest customers have their own ambitious custom silicon programs designed specifically to address AI needs. If these programs gain significant momentum, they could threaten Nvidia’s dominance.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions and recommends Nvidia. The Motley Fool has a disclosure policy.
Jensen Huang used one word to describe the demand for AI. It could be the biggest one of 2026. Originally published by The Motley Fool.
