Nvidia reported a 69% year-over-year rise in revenue for the first quarter of 2026, reaching $44.1 billion. This exceeded Wall Street's forecast of $43.28 billion. The company’s net profit stood at $18.78 billion, slightly below analysts’ expectations of $19.49 billion.
Earnings per share (EPS) came in at 73 cents, up from 61 cents a year ago. Nvidia’s stock gained more than 4% in after-hours trading following the announcement. The California-based chip giant closed regular trading as the second-most valuable company globally, with a market cap of $3.3 trillion, second only to Microsoft.
A day ahead of the results, Nvidia shares rose over 3% to $135.36.
Nvidia continues to face regulatory hurdles in China. The Biden administration's export controls have limited Nvidia’s ability to sell its H20 AI chips in the region, which made up 13% of its revenue in 2024.
The company has warned of potential $5.5 billion in charges due to the export ban. CEO Jensen Huang estimates a possible $15 billion in lost sales from China.
During the quarter, the U.S. government informed Nvidia that the previously approved H20 chip would now need an export license. Nvidia stated it incurred $4.5 billion in charges due to excess inventory and would have logged $2.5 billion more in sales without the restriction.
The company’s gross margin for the quarter stood at 61% but would have been 71.3% without the China-related hit.
Nvidia CEO Jensen Huang remarked, "The $50 billion market in China for AI chips is effectively closed to U.S. industry." He further added, "The H20 export ban ended our Hopper data center business in China."
Despite these setbacks, Nvidia's global business remains strong. Huang said, "Global demand for Nvidia’s AI infrastructure is incredibly strong."
Nvidia's data centre division, which includes AI chips, saw revenue jump 73% year-on-year to $39.1 billion, accounting for 88% of the company’s total revenue.
Large cloud providers generated nearly half of the division's revenue. Of the total, $5 billion came from networking products used to connect multiple GPUs for AI workloads.
CFO Colette Kress said, "Microsoft has deployed tens of thousands of Blackwell GPUs and is expected to ramp to hundreds of thousands” for use with OpenAI.
Nvidia's gaming business grew 42% year-on-year to $3.8 billion. While primarily an AI chipmaker today, the company still produces GPUs used in gaming and powers the upcoming Nintendo Switch 2.
Sales in the automotive and robotics division rose 72% to $567 million, driven by demand for self-driving car chips and software.
Meanwhile, the professional visualisation segment grew 19% to $509 million, bolstered by sales of Nvidia’s DGX Spark and DGX Station AI desktops.
During the quarter, Nvidia spent $14.1 billion on share repurchases and distributed $244 million in dividends. The company will pay its next quarterly dividend of $0.01 per share on July 3, 2025, to shareholders on record as of June 11, 2025.
Nvidia continues to show massive revenue and data centre growth, driven by booming global demand for AI chips. However, regulatory headwinds in China remain a concern. With continued innovation and growing interest in AI hardware, the company is well-positioned for long-term growth, but navigating export restrictions will be key in the coming quarters.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 29, 2025, 4:52 PM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and asset management, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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