Nvidia, a leader in artificial intelligence (AI) chips, reported first-quarter earnings for fiscal year 2026 (February to April) that exceeded market expectations; however, it projected that second-quarter results (May to July) would fall below market expectations. This is due to significant anticipated revenue impacts from tightened U.S. export regulations on AI chips to China initiated by the Trump administration.
On the 28th (local time), Nvidia announced that its first-quarter revenue increased by 69% year over year to $44.06 billion (approximately 60.6 trillion won), and net income rose by 26% year over year to $18.8 billion (approximately 25.8 trillion won). Adjusted earnings per share amounted to $0.96. Revenue surpassed Wall Street expectations of $43.31 billion (approximately 5.6 trillion won), compiled by research firm LSEG, and earnings per share also exceeded the forecast of $0.93.
Nvidia stated that the U.S. semiconductor export restrictions to China had a significant impact on its performance. The Trump administration restricted Nvidia's AI chip exports to China on April 9 to curb China's AI technology development. Nvidia reported an expense of $4.5 billion (approximately 6.2 trillion won) related to the inventory of these chips and noted that it would have generated an additional $2.5 billion (approximately 3.4 trillion won) in revenue if exports had not been prohibited. Consequently, while first-quarter revenue exceeded projections, the revenue growth rate was the lowest recorded by Nvidia over the past two years.
Eighty-eight percent of Nvidia's first-quarter revenue came from its data center institutional sector, which includes AI chips and related components. Sales in the data center sector increased by 73% year over year to $39.1 billion (approximately 53.76 trillion won), closely approaching Wall Street's expectations of $39.2 billion. Jensen Huang, Nvidia's Chief Executive Officer, noted, "Global demand for Nvidia AI infrastructure is very strong." Revenue from gaming, once Nvidia's core business, recorded $3.8 billion (approximately 5.2 trillion won).
Nvidia anticipates second-quarter revenue of $45 billion (approximately 61.8 trillion won). This figure falls short of the market forecast of $45.9 billion (approximately 63.1 trillion won). Nvidia's projection includes an $8 billion (approximately 11 trillion won) revenue loss from H20 AI chips due to export regulations.
On the same day, Nvidia's stock fell 0.51% during regular trading on the New York Stock Exchange but rose approximately 4.2% in after-hours trading following the earnings announcement.