Nvidia’s recent performances are shaking up market expectations and propelling its stock to new heights. Despite severe export restrictions, the company announces bright financial results. A record revenue of $44.1 billion demonstrates impressive resilience in the face of complex challenges. Investors are excited about a promising future, aware that artificial intelligence is becoming a must-have in the global tech landscape.
Nvidia’s financial results exceed forecasts
Nvidia recently announced its financial results for the first quarter of fiscal year 2026, reporting a performance that surpassed market expectations. Revenue generated by the core data center business rose by 73% compared to the previous year, reaching $39.1 billion (€34.7 billion). This growth remains impressive despite a slowdown from the 93% growth achieved in the previous quarter.
Positive impact on Nvidia’s stock
Following these results, Nvidia’s stock surged by nearly 5% in after-hours trading, narrowing the gap with its all-time high from January to 8%. Market analysts, such as Josh Gilbert from eToro Australia, interpreted this result as a sign of strong demand, reassuring investors about the company’s financial health.
Growth factors related to artificial intelligence
CEO Jensen Huang attributed this momentum to sustained global demand for artificial intelligence (AI) infrastructure, particularly from major cloud service providers. The introduction of the Blackwell AI chip is significant, as it is now in large-scale production. Huang emphasized that AI inference token generation has increased by ten times in one year, solidifying Nvidia’s position at the center of a profound transformation.
Pennies due to export restrictions to China
Nvidia is facing significant sales challenges, including export restrictions imposed by the US government regarding its H20 chips to China. These restrictions have resulted in an estimated loss of $8 billion (€7.1 billion) due to export control limitations. In this first quarter, the company recorded write-downs of $4.5 billion (€4 billion) related to unsold inventory surplus.
Forecasts and profit margins
For the current quarter, Nvidia anticipates revenues around $45 billion (€40 billion), with a projected non-GAAP gross margin of 72%, a slight decrease from 73.5% in the previous quarter. The current market context has forced the company to contend with an effective shutdown of the Chinese market, which represents $50 billion.
Strategic partnerships and expansion into other markets
Nvidia is also ramping up its international activities, notably through partnerships in Saudi Arabia to develop AI factories in the region. This initiative is part of large-scale projects supported by the US president. Analysts predict that the Middle East could become a new springboard for Nvidia’s next phase of growth.
Exploration of new technologies
As part of its strategy to mitigate the impact of US restrictions, Nvidia is considering developing alternatives to its H20 chip. Discussions are underway to obtain the necessary government approvals for these new initiatives. These efforts underscore Nvidia’s adaptability in the face of market uncertainties.
Frequently Asked Questions
Why have Nvidia’s stocks recently increased?
Nvidia’s stocks have seen significant gains following first-quarter financial results that exceeded market expectations, showcasing strong demand in the artificial intelligence sector.
What were Nvidia’s financial performances in the first quarter?
Nvidia reported revenues of $44.1 billion, reflecting a 69% increase compared to the previous year, with $39.1 billion in revenue stemming from its core data center business, up by 73%.
What are the impacts of chip export restrictions to China on Nvidia?
Export restrictions have led to an estimated loss of $8 billion, affecting sales outlooks in China, and resulting in $4.5 billion in write-downs related to an excess inventory of H20 chips.
What is Nvidia’s revenue forecast for the current quarter?
Nvidia expects revenue of $45 billion, with a projected non-GAAP gross margin of 72% for the current quarter.
How does Nvidia plan to offset the revenue loss related to China?
Nvidia is exploring alternatives to the H20 chip to reduce its dependence on Chinese markets while seeking other growth opportunities, particularly in the Middle East.
What role does artificial intelligence play in Nvidia’s growth?
The strong global demand for artificial intelligence infrastructure, particularly from major cloud service providers, is a crucial driver of Nvidia’s revenue growth.
What challenges does Nvidia face due to export regulations?
Nvidia is encountering challenges in obtaining export licenses, complicating sales of some of its technologies to Chinese customers and leading to significant financial adjustments.
What is the analysts’ opinion on Nvidia’s prospects?
Analysts remain generally optimistic about Nvidia’s future performance, highlighting the resilience of demand and the strategic positioning of the company in the AI sector.
