Nvidia Corp. (NVDA) delivered a mixed Q1 2026 earnings report, beating revenue expectations but missing slightly on earnings, while forecasting an $8 billion hit due to US export restrictions on its AI chips to China.
Q1 2026 Earnings Snapshot
In earnings released May 28 for its fiscal first quarter ended April 27, Nvidia posted:
- Revenue: $44.1 billion — up 12% QoQ and 69% YoY, beating estimates of $42.91B
- Earnings per Share (EPS): $0.81 — missing Wall Street forecasts of $0.85
- Net Income: $18.8 billion — up 26% YoY
Despite the EPS miss, Nvidia shares surged nearly 5% in after-hours trading, climbing from $134.81 to $141.40.
$8B Revenue Hit from China Curbs
The revenue beat was dampened by a $4.5 billion charge tied to US government export controls, which ban sales of Nvidia’s H20 AI chips to China. The company warned that these restrictions could cost it $8 billion in Q2 revenue.
To address the gap, Nvidia plans to launch a lower-cost AI chip tailored for the Chinese market, with mass production starting in June.
CEO Jensen Huang: “AI is Infrastructure”
On the earnings call, Nvidia CEO Jensen Huang emphasized the explosive global demand for AI infrastructure, likening it to “electricity and the internet.”
“AI inference token generation has surged tenfold in just one year… As AI agents become mainstream, demand for AI computing will accelerate,” Huang said.
Data Center Revenue Dominates
Nvidia’s data center segment continues to dominate, contributing $39.1 billion — nearly 89% of total revenue and up 10% from last quarter. This underscores the firm’s strategic pivot from gaming and graphics to AI and cloud infrastructure.
Q2 Outlook: Revenue to Hit $45B
Looking ahead, Nvidia expects Q2 2026 revenue to come in at around $45 billion, despite the projected $8 billion loss tied to export curbs. That signals continued growth driven by AI and data center momentum.
Conclusion
Despite geopolitical headwinds, Nvidia remains a dominant force in AI chips, with strong demand across global markets. While export curbs to China pose short-term challenges, Nvidia’s innovation in AI hardware is likely to sustain long-term growth.