Nvidia Achieves Historic $44 Billion Revenue Amidst H20 Export Restrictions Boosting Gaming Market
Breaking News: Nvidia Smashes Q1 Revenue Records, Giving a Glimpse into the AI-Driven Future
In a jaw-dropping announcement yesterday, Nvidia revealed its earnings for the first quarter of its fiscal 2026, featuring revenue of a staggering $44.062 billion - the company's all-time high.
The revenue surge was virtually universal, skyrocketing both sequentially and annually. With the scaling up of their top-tier Blackwell GPUs, Nvidia also set new sales records for both gaming and datacenter segments. However, the shipping ban of H20 GPUs to China took a significant chunk out of the margins.
A Quarter to Remember
For the opening quarter of fiscal 2026, Nvidia reported GAAP revenue at $44.062 billion, marking a robust 12% jump quarter-over-quarter (QoQ) and a massive 69% increase year-over-year (YoY). The company's gross margin plummeted to 60.5%, primarily due to a $4.5 billion hit from writing off H20 inventory because of the recent U.S. export restrictions enforced in early April. Excluding this charge, Nvidia's non-GAAP margin would've been a considerable 71.3%, still lower than 78.9% in Q1 FY2025 and 73.5% in Q4 FY2025. Nvidia's operating income amounted to $21.6 billion, down 10% from the previous quarter but soaring 28% YoY, with net income hitting $18.8 billion, a 15% sequential decline yet a 26% hike from the same period last year.
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With data center revenue reaching an all-time high of $39.112 billion, Nvidia shattered records featuring $34.155 billion compute revenue and $4.957 billion networking revenue. This growth represented a 10% surge QoQ and a whopping 73% YoY increase, propelled by a global surge in demand for AI infrastructure.
It's important to note that Nvidia doesn't divulge the split between Blackwell and Hopper AI GPUs sales, as well as the split between Blackwell and Hopper system sales. However, they confirmed that the transition to Blackwell is almost complete, with just a few Hopper processor enthusiasts left. Moreover, the company underscored strong momentum in Blackwell-based systems as NVL72 GB200 machines moved to full-scale production during the quarter.
"Our revolutionary Blackwell NVL72 AI supercomputer, an intelligent machine designed for reasoning, is now in full-scale production across system manufacturers and cloud service providers," emphasized Jensen Huang, founder and CEO of Nvidia. "The global demand for Nvidia's AI infrastructure is nothing short of extraordinary. AI inference token generation has ballooned tenfold in just one year, and as AI agents take the mainstream stage, the demand for AI computing will speed up."
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Nvidia's gaming products also grabbed headlines with record-breakingly spectacular revenue of $3.8 billion - a colossal 48% increase from the previous quarter and a 42% YoY boost during Q1 FY2025. This growth was spurred by multiple factors, including the shortfall in gaming GPU shipments in the previous quarter and the release of Nvidia's mainstream GeForce RTX 5070 and 5060-series products based on the Blackwell architecture. As for the OEM and other segment, it generated $111 million, falling 12% sequentially but increasing 42% YoY.
Nvidia's professional visualization (ProViz) business reported revenue of $509 million, dipping slightly from $511 million QoQ but jumping 19% from $427 million in the same quarter last year. This may insinuate that workstation manufacturers continued to buy Ada Lovelace-based professional graphics cards despite the impending launch of Blackwell-based RTX Pro graphics boards in May, possibly due to uncertainties regarding U.S. tariffs.
It's noteworthy that the combined sales of Nvidia's client and professional GPUs, reported under gaming, ProViz, OEMs, and other monikers, were $4.42 billion, albeit lower than the sales of Nvidia's networking gear.
Lastly, Nvidia's automotive and robotics segment earned $567 million, dropping from $570 million in the previous quarter but skyrocketing 72% from $329 million in Q1 FY2025.
Bright Horizons Ahead
For the second quarter of fiscal 2026, Nvidia anticipates revenue of approximately $45.0 billion ± 2%. The company's Q2 revenue outlook could've been $8.0 billion higher if not for the H20 export restrictions. However, the company projects GAAP gross margins of 71.8% and aims to reach mid-70% gross margins as the year progresses. This recovery reflects improved product mix and normalization following the Q1 charge related to the unsellable H20 units.
Expenses in Q2 FY2026 are projected to be around $5.7 billion on a GAAP basis, the bulk being allocated for research and development (R&D).
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The remarkable revenue surge at Nvidia, attributable to the success of their AI-driven products, is a testament to the fusion of finance and technology in the AI- driven future. The data center revenue, driven by AI infrastructure demand, reached an all-time high of $39.112 billion, bolstering the company's financial standing.
