Nvidia posts mixed Q1, predicts $8B hit with US chip curbs

Nvidia’s First Quarter 2026 Results: Strong Revenue, Missed Earnings Expectations

Nvidia, a leading chip manufacturer, reported mixed results for its first fiscal quarter of 2026, ending April 27th. While the company exceeded revenue projections, it fell short of earnings per share (EPS) expectations, primarily due to US export restrictions impacting its sales to China.

Revenue reached $44.1 billion, a 12% increase from the previous quarter and a substantial 69% year-over-year growth. This surpassed Zacks analyst estimates of $42.91 billion by approximately 2.7%. However, EPS came in at 81 cents, missing the anticipated 85 cents. Net income totalled $18.8 billion, representing a 26% year-over-year increase.

The shortfall in EPS was attributed to a $4.5 billion charge resulting from US government restrictions on exporting its high-performance H20 AI chips to China. Nvidia CEO Jensen Huang emphasized the robust global demand for the company’s AI infrastructure, highlighting the increasing recognition of AI as crucial infrastructure, comparable to electricity and the internet. He noted a tenfold increase in AI inference token generation within a year, further underscoring the accelerating demand for AI computing.

Looking ahead, Nvidia projects approximately $45 billion in revenue for the second quarter. This projection incorporates an estimated $8 billion revenue loss due to the ongoing export control limitations. To mitigate the impact of these restrictions, Nvidia plans to launch a new, lower-cost AI chip specifically for the Chinese market, with mass production slated to begin in June.

Nvidia’s data center revenue significantly contributed to the overall results, reaching $39.1 billion—a 10% increase compared to the previous quarter. Despite the slightly disappointing EPS, the stock initially dipped by 0.51% but rallied by 4.89% after hours, reflecting investor confidence in Nvidia’s long-term prospects within the rapidly expanding AI market. This strong performance follows Huang’s previous statements about Nvidia’s commitment to leading the development of agentic AI. The company’s financial performance underscores the growing importance of AI in the global technology landscape and the strategic challenges presented by geopolitical factors.