Nvidia’s latest earnings report presents a mixed picture, with strong revenue growth overshadowed by challenges tied to US export restrictions. The chipmaking titan revealed its first quarter results for fiscal 2026 on May 28, showcasing robust sales but missing earnings estimates due to mounting geopolitical pressures.
For the quarter ending April 27, Nvidia reported revenue of $44.1 billion — a significant 12% rise over the previous quarter and an impressive 69% increase compared to the same period last year. This figure comfortably exceeded analysts’ expectations, which hovered around $42.9 billion. Yet, despite the revenue boost, Nvidia’s earnings per share (EPS) came in at 81 cents, slightly under the anticipated 85 cents, reflecting some underlying cost pressures.
Nvidia’s net income reached $18.8 billion, marking a 26% jump year-over-year. While the financial performance is strong, the company’s leadership sounded cautious on its earnings call. CEO Jensen Huang highlighted the surging global demand for AI infrastructure, emphasizing that artificial intelligence is fast becoming as fundamental as utilities like electricity and the internet. Huang pointed out that AI inference token generation has multiplied tenfold within a year, signaling an accelerated need for powerful computing to support increasingly sophisticated AI applications.
Despite the optimism, Nvidia also flagged a significant $4.5 billion hit stemming from new US government export controls. These restrictions limit the company’s ability to ship its high-end H20 AI chips to China — a major market. As a result, Nvidia anticipates the full impact to reach approximately $8 billion in lost revenue during the upcoming quarter.
To counteract these limitations, Nvidia plans to release a more affordable AI chip tailored specifically for the Chinese market, with mass production slated to begin in June. This move demonstrates Nvidia’s strategic agility in navigating geopolitical headwinds while trying to maintain its foothold in key markets.
The lion’s share of Nvidia’s revenue came from its data center division, which reported $39.1 billion, a 10% increase from the previous quarter. This area remains the company’s primary growth engine, driven by demand for AI and cloud computing hardware.
Following the earnings release, Nvidia’s stock experienced typical volatility. Shares closed May 28 at $134.81, down slightly by 0.51%, but surged nearly 5% in after-hours trading to reach $141.40. This rally indicates investor confidence in Nvidia’s long-term growth prospects despite the short-term hurdles.
Nvidia is positioning itself at the forefront of the “agentic AI” revolution, where AI systems operate autonomously and intelligently in complex environments. Huang has emphasized the company’s commitment to leading this emerging technology frontier amid fierce competition.
Other US tech giants are also ramping up AI investments. For instance, Microsoft announced in September plans to establish two new AI research centers in Abu Dhabi, reflecting the global race to dominate AI infrastructure and innovation.
Interestingly, this AI momentum is also influencing the cryptocurrency space. Bitcoin mining firms have started to diversify their revenue streams by converting some of their crypto mining operations to support AI workloads, particularly large language models, blending blockchain technology with cutting-edge artificial intelligence.
In summary, Nvidia’s Q1 results reflect both the enormous opportunities and growing challenges in the AI and semiconductor sectors. While geopolitical tensions and regulatory hurdles may temper near-term earnings, Nvidia’s strategic moves and the surging global appetite for AI infrastructure position it well for sustained growth in the years ahead.
