Nvidia reported strong financial results for the first quarter of fiscal 2026, with revenue reaching $44.1 billion, a 12% increase from the previous quarter and a 69% increase compared to the same period last year. The company’s data center revenue, which accounts for a significant portion of its business, grew by 10% quarter-over-quarter and 73% year-over-year to $39.1 billion. However, Nvidia faced challenges due to new export licensing requirements imposed by the U.S. government on its H20 products to China.
This resulted in a $4.5 billion charge related to excess inventory and purchase obligations. The company was unable to ship an additional $2.5 billion in revenue during the quarter. Jensen Huang, founder and CEO of NVIDIA, highlighted the strong demand for the company’s AI infrastructure, stating, “Global demand for NVIDIA’s AI infrastructure is incredibly strong.
AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.”
Despite the challenges, Nvidia expects revenue for the second quarter of fiscal 2026 to be $45.0 billion, plus or minus 2%.
Nvidia reports record revenue surge
The company also anticipates GAAP and non-GAAP gross margins to be 71.8% and 72.0%, respectively.
Nvidia’s gaming segment saw significant growth, with revenue increasing by 48% quarter-over-quarter and 42% year-over-year to $3.8 billion. The company released new graphics solutions and platforms for gamers, including the launch of the Nintendo Switch 2 powered by an NVIDIA processor. In the automotive and robotics segment, Nvidia announced a collaboration with General Motors on next-generation vehicles, factories, and robots, although revenue in this segment slightly decreased by 1% quarter-over-quarter.
Traders expect Nvidia’s stock to move approximately 6% in either direction by the end of the week, based on options pricing data. The company’s shares have surged nearly 25% over the past month, contributing to a 1% increase since the beginning of the year. Analysts predict that Nvidia will report revenue and earnings growth in the most recent quarter, with the majority recommending buying the stock.
They have set an average price target of $164, suggesting a 25% upside from Friday’s close.
