Nvidia Q1 FY26 revenue jumps to $44.1b, up 69% YoY

Nvidia reported revenue of U$44.1 billion for Q1 fiscal 2026, up 12% from the previous quarter and 69% year-over-year.

Data Center revenue hit US$39.1 billion, growing 10% quarter-over-quarter and 73% year-over-year.

The company incurred a US$4.5 billion charge due to excess inventory and purchase obligations tied to its H20 products.

This follows new US export restrictions requiring licenses for H20 sales to China, delaying US$2.5 billion in potential revenue.

GAAP gross margin for the quarter was 60.5%, and non-GAAP gross margin was 61.0%. Excluding the H20 charge, non-GAAP gross margin would have been 71.3%.

Nvidia expects Q2 fiscal 2026 revenue of US$45 billion, plus or minus 2%, with continued H20 losses. Gross margins are expected between 71.8% and 72.0%.

🔗 Source: Nvidia

🧠 Food for thought

1️⃣ Export restrictions reveal high-stakes semiconductor geopolitics

NVIDIA’s earnings show the significant financial impact of U.S. export controls on semiconductor companies, with a $4.5 billion inventory charge after being informed they needed licenses for H20 chips to China 1.

The impact extends beyond NVIDIA, as the Federal Reserve Bank of New York found statistically significant drops in revenue, profitability, and employment among affected U.S. semiconductor firms following export controls 1.

U.S. restrictions reflect a complex balancing act between national security and economic interests, particularly given China represents 31.4% of global semiconductor purchases, with U.S. firms capturing 53.4% of this market 1.

Despite the immediate financial hit, NVIDIA’s quarter still saw 69% year-over-year revenue growth to $44.1 billion, demonstrating the company’s ability to navigate geopolitical challenges while maintaining strong overall performance 2.

The company’s strategy to build U.S.-based factories and expand partnerships in the Middle East shows how tech giants are adapting to export restrictions by diversifying both production and market presence 2.

2️⃣ NVIDIA’s AI market dominance faces potential future challenges

NVIDIA’s latest earnings highlight its extraordinary position in the AI chip market, where it holds an estimated 85-90% market share, creating a near-monopoly in a rapidly growing sector 3.