Nvidia Crushes Quarter, Stock Unmoved.

Mazen Al Sabbagh

— 6 min read
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TL;DR

  • Nvidia's Q1 performance: Record $81.6B revenue and $91B Q2 guidance, tripling net income to $58.3B. Despite beating all metrics and authorizing $80B in buybacks, the stock experienced muted reaction as rising oil prices and Treasury yields overshadowed results.
  • Anthropic achieves early profitability: Q2 revenue projected at $10.9B (up 130% from Q1's $4.8B), with an anticipated $559M operating profit, reaching profitability two years ahead of its own forecast.
  • SpaceX's IPO reveals xAI burn: The largest IPO prospectus in history detailed $4.7B Q1 revenue against a $4.3B net loss, with xAI burning through 76% of capital spending; Grok's "Spicy Mode" flagged as a reputational risk.
  • Trump postpones AI executive order: The planned signing was pulled hours before the ceremony, with President Trump citing concerns it could dull America's AI competitive edge, introducing uncertainty into the regulatory landscape.
  • Anthropic expands enterprise footprint: Its Blackstone-backed consulting joint venture acquired Fractional AI, a firm previously within OpenAI's ecosystem, escalating the competition for enterprise AI deployment.

Lead Story: Nvidia Crushes Quarter, Stock Unmoved.

Nvidia reported record Q1 fiscal 2027 results post-market Wednesday, outperforming on every metric. Revenue reached $81.6 billion, an 85% year-over-year increase, exceeding the $78.86 billion consensus by 3.5%. Adjusted earnings per share hit $1.87 against an expected $1.77. Net income surged 211% to $58.3 billion, with gross margins holding strong at 75%. Data center revenue, now representing 92% of total intake, nearly doubled to $75.2 billion, surpassing the $73.2 billion estimate.

The subsequent Q2 guidance projected $91 billion, plus or minus 2%, approximately $4 billion above the buy-side whisper of $87 billion, indicating a 95% year-over-year growth trajectory. Crucially, Nvidia's outlook does not factor in data center compute revenue from China, suggesting any future H200 shipment clearances would represent pure upside.

Jensen Huang detailed a "massively expanding supply chain" and described Nvidia's AI strategy as a "five-layer cake." The company also augmented its share repurchase authorization by $80 billion and increased its quarterly dividend to $0.25 per share. Despite this comprehensive beat, shares dipped approximately 1.3% after hours Wednesday and oscillated between gains and losses Thursday as broader market pressures from rising oil prices and Treasury yields took precedence. Bloomberg presented a notably bearish counterpoint, asserting that mounting chip competition, rather than the earnings themselves, warrants investor scrutiny. CNBC's Investing Club raised its price target, terming it "another knockout quarter," yet acknowledged Nvidia's pattern of post-earnings declines in five of its last six reports despite consistent beats.

In Other News

Anthropic achieves early profitability amid significant compute commitments. The Wall Street Journal reported Wednesday that Anthropic has informed investors of an expected $10.9 billion in Q2 revenue, a 130% increase from Q1's $4.8 billion, coupled with an operating profit around $559 million. This growth rate surpasses the historical peaks of Zoom, Google, and Facebook at similar stages. While Anthropic cautioned that full-year profitability might not sustain due to substantial compute expenses scheduled for H2 2026, the SpaceX S-1 filing provided context: Anthropic is committed to pay SpaceX nearly $45 billion over three years ($1.25 billion per month through May 2029) for compute capacity. Separately, the Anthropic-Blackstone-Hellman & Friedman enterprise consulting JV announced its first acquisition Thursday: Fractional AI, a San Francisco applied AI firm previously operating within OpenAI's ecosystem, intensifying the strategic competition for enterprise AI deployment.

SpaceX reveals largest IPO prospectus in history, xAI drives substantial losses. The S-1 filing landed Wednesday detailing plans to list on Nasdaq under the ticker SPCX, targeting a $1.75 trillion valuation and a $75 billion raise — more than double Saudi Aramco's record. The financial disclosures presented a complex picture: Q1 2026 revenue of $4.69 billion against a $4.28 billion net loss. These losses directly trace to the xAI subsidiary, which incurred $6.4 billion in operating losses on $12.7 billion of capital expenditure. Forbes highlighted a new disclosure Thursday: the S-1 reveals X has 550 million monthly active users, with one-fifth engaging Grok, but warns that Grok's "Spicy Mode" carries "reputational harm" risk. Musk will retain 85.1% of voting power via a dual-class structure, serving as CEO, CTO, and Chairman. Goldman Sachs, Morgan Stanley, and Bank of America are managing the offering, with a June 12 listing date.

Trump's AI executive order postponed, creating policy void. In an abrupt reversal, President Trump postponed the signing of his anticipated AI executive order Thursday morning, stating to reporters, "I didn't like certain aspects of it," and expressing concern that it might hinder America's AI competitive edge against China. Axios first reported the delay after the White House had already extended invitations to AI company CEOs. The order would have established a voluntary 90-day pre-release review framework for frontier models, with the NSA determining safety and Treasury leading a cybersecurity clearinghouse—a direct response to models like Anthropic's Mythos and OpenAI's GPT-5.5-Cyber. The Washington Post characterized it as an attempt to rebuild defenses previously dismantled by the administration. Politico noted that neither Anthropic CEO Dario Amodei nor Meta CEO Mark Zuckerberg had planned personal attendance. The rescheduling of the signing remains uncertain.

X / Social Pulse

Nvidia's earnings dominated overnight discourse, with traders dissecting the paradox of a company's stellar performance failing to ignite stock gains; "priced for perfection" became the pervasive sentiment. The morning's sharpest jolt was President Trump's sudden postponement of the AI executive order; CNBC's direct quote — "I didn't like certain aspects" — encapsulated the industry's whiplash. Reuters Breakingviews' pointed column asserting OpenAI's IPO "has a Sam Altman problem" further fueled discussion, citing a $600 billion compute funding need and Anthropic's perceived lead. The SpaceX S-1 generated strong reactions to xAI's loss figures; Axios described SpaceX as "not the behemoth everyone thought", while the Grok "Spicy Mode" reputational risk disclosure rapidly memeified. Newsom's AI workforce order served as a thematic counterpoint, representing the first formal state-level preparation for AI-driven displacement amidst escalating layoff numbers.

One to Watch

AI-driven restructuring accelerates across high-revenue tech firms. Within a concentrated 24-hour period, Meta began notifying 8,000 employees, Intuit cut 3,000 positions (17% of its workforce, leading to a 13% after-hours stock tumble), pushing the running 2026 total past 114,000 tech layoffs. The NYT's DealBook featured a front-page piece on "growing anxiety over AI, jobs, and the future", while a Meta employee created an internal AI-generated radio station playing songs about job cuts—ironically utilizing the very technology driving the workforce reductions. Intuit CEO Sasan Goodarzi insisted the cuts had "nothing to do with AI"—yet acknowledged that partnerships with Anthropic and OpenAI are foundational to the company's forward strategy. Business Insider's 2026 layoff tracker now lists over 30 major corporations impacted.

Quick Hits

  • Spotify and Universal Music Group announced a landmark licensing deal allowing premium users to generate AI covers and remixes of songs—the first major label agreement to monetize fan-created AI music, with Spotify stock soaring 15%.
  • California Governor Newsom signed the first state executive order directing agencies to prepare for AI-driven job displacement, including exploring universal basic capital, severance standards, and an AI layoff tracking dashboard.
  • EY and Microsoft announced a $1B+ global initiative to scale agentic AI across enterprise clients—the third Big Four firm this month to execute a major AI alliance move.
  • Demis Hassabis told Semafor that Google is at "the foothills of the singularity"—the most explicit public statement yet from a major lab leader on the proximity of recursive self-improvement.
  • Reuters Breakingviews argued OpenAI's IPO faces a "Sam Altman problem"—citing $600B in compute funding requirements, Anthropic's competitive edge, and CEO controversies that "invite fresh scrutiny" pre-listing.

Wednesday evening delivered perhaps the densest two hours in AI industry history. Nvidia confirmed that infrastructure spending is generating tangible returns. Anthropic demonstrated the model layer’s capacity for profitability. SpaceX’s S-1 filing revealed that AI ambitions arrive with a quarterly bill measured in billions. Concurrently, the White House, after months of dismantling its predecessor's AI regulations, attempted to erect new defenses—only to recoil at the eleventh hour when the president concluded that regulation might incur higher costs than it prevents. The resultant policy vacuum emerges precisely as Newsom mandates California to prepare for AI displacement, and 114,000 tech workers have already been impacted this year. The AI economy is now too expansive, too rapid, and too consequential for any single entity to control its narrative—and Thursday proved that includes the White House.

Sources

Lock in. M. mazen@thorterminal.com

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