Three AI stocks, three numbers to watch: Nvidia, Microsoft and Credo
AI stocks are often discussed as one trade. Their financial statements tell three different stories. Here's one number to understand for each of three companies.
Nvidia: how concentrated the business has become
In the second quarter of its fiscal 2027, Nvidia reported $96.2 billion in revenue, of which $89.0 billion came from its Data Center segment. That's about 93% of the total. Data Center revenue grew 117% from a year earlier, and company-wide GAAP gross margin was 75%.
Data Center isn't exclusively AI, but the share shows how much of an Nvidia investment is a bet on data-centre demand. The numbers to watch are revenue growth alongside gross margin: can Nvidia keep that profitability as it grows?
Microsoft: more cash in, less cash left
| FY2025 | FY2026 | |
|---|---|---|
| Operating cash flow | $136.2B | $182.9B |
| Cash additions to property and equipment | $64.6B | $115.9B |
| Simple free cash flow | $71.6B | $67.0B |
Operating cash flow rose about $47 billion, or 34%. Capital spending rose even more, so cash left after spending fell about 6.5%. The infrastructure supports more than AI, but the pattern is clear: the build-out absorbed all of the growth in cash generation and more.
Credo: two growth rates, both true
Credo (CRDO) sells high-speed connectivity products used in data centres: the links that let chips talk to each other. In the first quarter of its fiscal 2027, revenue reached $479.0 million, up 114.7% from a year earlier and 9.6% from the previous quarter. It ended the quarter with $764.3 million in cash and short-term investments.
Year-over-year and quarter-over-quarter growth measure different periods. A headline "+115%" can coexist with much slower recent growth, so check both before concluding anything about momentum.
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Disclosure: I own shares of Nvidia (NVDA) and Microsoft (MSFT). I don't own Credo (CRDO). Education only, not financial or investment advice, and not a recommendation to buy or sell any security. Figures are as reported for the periods named; check the companies' own filings for current information.