NVIDIA Corporation (NVDA) Stock:  Soars on 69% YoY Revenue Jump in Q1 FY26

TLDR

NVIDIA smashes Q1 FY26 with $44.1B revenue, led by booming AI and data center demand.

Despite a $4.5B H20 export hit, NVIDIA’s AI dominance fuels 5% after-hours stock surge.

Data center revenue soars 73% YoY to $39.1B, securing NVIDIA’s global AI leadership.

Gaming, automotive, and pro visualization segments post strong double-digit growth.

Q2 outlook targets $45B revenue as NVIDIA eyes mid-70% gross margins post-H20 adjustment.

NVIDIA Corporation reported record-breaking revenue of $44.1 billion for Q1 FY26, driven by strong AI and data center demand. Although a $4.5 billion H20 charge impacted margins, investors responded positively due to stronger-than-expected core performance. The stock rose over 5% in after-hours trading, highlighting confidence in NVIDIA’s AI leadership.

NVIDIA Corporation (NVDA)

AI Supercomputing Drives Record Data Center Growth

NVIDIA’s data center revenue reached $39.1 billion in Q1 FY26, marking a 73% year-over-year increase and 10% quarterly growth. This segment benefitted from surging demand for AI infrastructure and accelerated computing across global markets. Despite the H20 restrictions, NVIDIA continues to lead the AI hardware market with expanding partnerships.

Besides expanding AI clusters, NVIDIA announced new product launches such as Blackwell Ultra and NVLink Fusion to meet growing inference workloads. Moreover, collaboration with partners like Oracle, SoftBank, and Foxconn is reinforcing the company’s AI factory strategy. Consequently, enterprise demand remains robust as nations prioritize AI as critical infrastructure.

The company also revealed partnerships across the UAE, Saudi Arabia, and Japan to develop large-scale AI and quantum computing centers. These developments align with NVIDIA’s mission to scale AI globally using high-performance infrastructure.

H20 Export Restrictions Lead to Inventory Charge

NVIDIA incurred a $4.5 billion charge in Q1 due to U.S. export restrictions on H20 products targeting the Chinese market. Despite shipping $4.6 billion worth of H20 units, the company was unable to fulfill $2.5 billion in additional demand. As a result, non-GAAP gross margin dropped to 61%, down from 73.5% in Q4.

NVIDIA, $NVDA, Q1-FY26. Results:
🟢 +3.7% Post-Market

📊 Adj. EPS: $0.81 🟢
💰 Revenue: $44.1B 🟢
🔎 A $4.5B charge from new U.S. export controls on H20 products hit margins, but demand for NVIDIA’s AI infrastructure remains strong with major expansions across global AI… pic.twitter.com/GfKrTjHVhQ

— EarningsTime (@Earnings_Time) May 28, 2025

However, excluding the H20 impact, adjusted gross margin reached 71.3%, indicating strong operational efficiency. NVIDIA continues adjusting its supply chain to mitigate the export impact while protecting its long-term AI strategy. The company expects to stabilize margins around 72% in Q2 FY26, with a goal of reaching mid-70% levels later.

Furthermore, operating income fell 9% to $23.3 billion on a non-GAAP basis, while net income declined 10% to $19.9 billion. Despite these temporary setbacks, the strong demand for AI offset part of the losses. NVIDIA reiterated its outlook of $45 billion revenue for Q2, excluding about $8 billion in H20 losses.

Gaming, Automotive, and Visualization Segments Show Steady Momentum

NVIDIA reported $3.8 billion in gaming revenue for Q1 FY26, up 42% year-over-year and 48% from the previous quarter. Strong sales of RTX 5070 and 5060 products helped boost demand, alongside upcoming AI-powered Nintendo Switch 2 devices. Moreover, DLSS 4 adoption across over 125 games supported higher GPU sales.

In the professional visualization segment, NVIDIA generated $509 million in revenue, rising 19% from last year. New AI-powered workstation products and strategic software partnerships enhanced this segment’s relevance. The industry’s integration of NVIDIA’s Omniverse platform is accelerating digital transformation in the industrial sector.

Automotive revenue reached $567 million, up 72% year-over-year, reflecting growing demand for autonomous and smart vehicle systems. The company announced collaborations with General Motors and launched NVIDIA Halos for AV safety. AI robotics advancements, including humanoid models, strengthened its position in the automotive and robotics industries.

Future Outlook

NVIDIA delivered solid performance in Q1 FY26, with AI infrastructure powering substantial year-over-year revenue growth despite trade-related challenges. Its diversified product strategy and global partnerships position it well for the evolving AI economy. As the company targets $45 billion in Q2 revenue, investor sentiment remains confident in its AI-driven future.

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