Nvidia 2026 Q1 Earnings Beats Expectations with Net Income Rising 26%

Nvidia (NVDA), ranking 2nd by market capitalization, reported its fiscal 2026 Q1 earnings on May 28th, 2025. The results exceeded Wall Street expectations as Nvidia's revenue reached $44.1 billion, surpassing forecasted figures. The company's guidance for Q2 was slightly below expectations with anticipated revenue of $45 billion, plus or minus 2%. Nvidia remains confident in its growth prospects despite geopolitical challenges impacting its China market. The company continues to focus on expanding its AI infrastructure capabilities globally.

Revenue
Nvidia's revenue surged by 69.2% in fiscal 2026 Q1, totaling $44.06 billion, compared to $26.04 billion in 2025 Q1. The Data Center segment dominated with $39.11 billion, demonstrating significant demand for AI infrastructure. The Compute division also showed robust growth, contributing $34.16 billion. Networking operations generated $4.96 billion, while Gaming revenue hit $3.76 billion. Professional Visualization brought in $509 million, Automotive reached $567 million, and OEM and Other accounted for $111 million.

Earnings/Net Income
Nvidia's EPS increased by 28.3% to $0.77 in 2026 Q1 from $0.60 in 2025 Q1, reflecting continued earnings growth. Net income reached $18.77 billion, marking a 26.2% increase from $14.88 billion in 2025 Q1, setting a new record high for fiscal Q1 net income. The EPS results indicate a strong financial performance, exceeding market expectations.

Post-Earnings Price Action Review
The strategy of buying Nvidia shares after a quarterly revenue drop on the earnings report release date and holding for 30 days has consistently delivered robust returns over the past three years. Achieving a remarkable CAGR of 65.25%, this strategy has significantly outperformed the benchmark return of 39.33%, yielding an excess return of 304.79%. Despite experiencing a maximum drawdown of -40.01% and a Sharpe ratio of 1.22, the strategy's overall performance highlights its effectiveness in capturing Nvidia's rebound following earnings declines. Investors have successfully capitalized on Nvidia's recovery, leveraging market fluctuations to generate impressive gains.

CEO Commentary
Jensen Huang, President and Chief Executive Officer, emphasized Nvidia's significant surge in inference demand, particularly with reasoning AI driving exponential growth. He highlighted the company's Grace Blackwell NVLink72 as a key component to enhance inference performance, stating, "It is going to be a huge, huge benefit in driving down the cost while improving the quality of response." Huang expressed confidence in Nvidia's future, underscoring the importance of AI infrastructure and the company's commitment to onshore manufacturing and global partnerships.

Guidance
Nvidia expects total revenue for Q2 to be $45 billion, plus or minus 2%. The company anticipates continued growth in its Data Center segment, partially offset by a decline in China revenue due to export controls on the H20 product, resulting in an approximate loss of $8 billion in revenue. Gross margins are projected at 71.8% for GAAP and 72% for non-GAAP, with operating expenses anticipated around $5.7 billion (GAAP) and $4 billion (non-GAAP).

Additional News
Recently, Nvidia announced a strategic partnership with Saudi Arabian AI company Humain, which is expected to boost its top line by an additional $800 million to $1 billion. This partnership involves selling more than 18,000 AI GPUs, including its GB300 Blackwell chips, to Humain. Furthermore, Nvidia has been actively expanding its AI infrastructure in Sweden, helping local enterprises build the country's largest AI supercomputer. The company has also been involved in discussions with India and the United Arab Emirates for similar projects, demonstrating its commitment to global AI expansion.

Article Polishing
Nvidia's earnings report reflects a strong performance in Q1 2026, with record revenue and net income, highlighting its continued growth in the AI sector. The company's strategic partnerships and global expansion plans further reinforce its leadership position in AI infrastructure, despite the geopolitical challenges impacting its China market. Investors remain optimistic about Nvidia's future prospects, supported by the company's robust financial results and strategic initiatives.