Nvidia Stock Climbs Despite $8B China Hit, Driven by Soaring AI Demand and Record Revenue
Chipmaker’s Q1 earnings surpass expectations as global AI investments offset export restrictions.
Nvidia stock rose more than 5% after hours on a strong fiscal Q1 2026 quarterly earnings report, brushing aside fears over U.S. export controls to China. The chipmaker posted 69% year-over-year revenue growth to $44.06 billion, better than Wall Street’s $43.3 billion forecast. That was fueled by a 73% rise in data center revenue to $39.1 billion, fueled by strong demand for AI infrastructure.
Navigating the China Challenge
Regardless of the staggering revenues, Nvidia has a big challenge in its way through U.S. export control on AI chips to China. The corporation had a $4.5 billion charge for unrealized H20 chip inventory and lost $2.5 billion in revenues due to trade restrictions. In the future, Nvidia is projecting an $8 billion revenue miss in Q2 through such restrictions.
CEO Jensen Huang was critical of the long-term effects of these policies, warning they could strengthen Chinese rivals and slow U.S. leadership in AI. He highlighted the strategic value of the Chinese market and noted efforts to create compliant products for China.
Global Expansion and AI Momentum
In a bid to cushion the blow of the China market cutoff, Nvidia is spreading its tentacles worldwide. It has won large orders in the Middle East and Asia, such as AI infrastructure deals in Saudi Arabia and Taiwan. Nvidia also intends to open a quantum computing research lab in Boston, further spreading its technological bets.
Regardless of geopolitical setbacks, Nvidia is optimistic about its growth path. Nvidia’s new Blackwell chips have been adopted very quickly, and big tech companies such as Microsoft, Amazon, Google, and Meta keep spending significantly on Nvidia technology. Experts predict long-term growth, attributing this to the company’s resilience to stay ahead even with restrictions and take advantage of the worldwide AI boom.
Financial Highlights
Revenue: $44.06 billion (Q1 FY2026), up 69% year-over-year
Data Center Revenue: $39.1 billion, up 73% year-over-year
Net Income: $18.8 billion, a 26% increase year-over-year
Adjusted Gross Margins: 71.3%, aligning with forecasts
Q2 Revenue Forecast: $45 billion, slightly below Bloomberg’s $45.5 billion estimate
Market Response
Investors took Nvidia’s earnings announcement in a good light, with the company rising more than 5% following the close. The company’s performance despite the projected $8 billion revenue loss in China shows the resilience of the company and demand for AI infrastructure worldwide.
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