Nvidia’s (NVDA) fiscal first-quarter results, released on May 28, 2025, and the focus on its upcoming earnings, have become a defining theme for the tech and AI sectors. The company continues to ride the wave of surging AI infrastructure demand, while also navigating geopolitical headwinds and regulatory challenges.
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Q1 FY2026 Highlights
- Revenue soared to $44.06 billion, exceeding Wall Street’s $43.32 billion estimate.
- Data center revenue jumped 73% year-over-year to $39.1 billion, underscoring the AI-driven surge.
- Nvidia absorbed a $4.5 billion charge due to excess H20 chip inventory, stemming from U.S. export restrictions to China. It also missed shipping an additional $2.5 billion in potential H20 sales.
- Stock reaction: Despite these headwinds, investor sentiment remained strong, with NVDA shares rising over 5% after hours.
Looking Ahead: Q2 & Beyond
- Revenue outlook for Q2: Nvidia forecasts around $45 billion (±2%), while projecting an $8 billion hit from continued H20 export limitations.
- Analyst projections: Expectations stand at approximately $45.9 billion in revenue and a 48% net profit increase, with earnings per share (EPS) near $1.
- Valuation concerns: NVDA trades at a lofty multiple, over 56× trailing earnings, prompting debate on sustainability amid uncertain AI market valuations.
China Market & Geopolitical Risks
- H20 export restrictions have caused a material disruption in China-bound AI chip sales, impacting both earnings and future guidance.
- Ongoing negotiations and partial resumption of China sales may offer some relief, but uncertainty remains elevated.
- Investor sentiment is split: Bulls anticipate continued AI dominance, while skeptics warn that any slowdown or regulatory shock could sharply temper the stock’s momentum.
Nvidia as a Tech Barometer
- Nvidia’s share price has climbed over 30% year-to-date, and since the ChatGPT launch in late 2022, surged roughly 930%, affirming its role as a central indicator of AI market enthusiasm.
- Market experts point to Nvidia’s Q2 earnings as a potential sentiment-shifter, with broader tech and AI sector performance likely to hinge on the results.
The Bottom Line
Nvidia continues to command attention as both a growth engine and a market bellwether. Its Q1 performance surpassed expectations, drumming up optimism—and its Q2 forecast, while strong, acknowledges geopolitical friction. As the AI-driven rally persists, NVDA’s earnings will be closely watched as a catalyst for broader market direction.
