Nvidia (NVDA, Financials) reported fiscal Q1 2026 revenue of $44.1 billion, up 12% sequentially and 69% year over year, beating analyst expectations and sending shares higher on Wednesday. Data center revenue soared 73% to $39.1 billion. Despite a $4.5 billion charge linked to unsold H20 inventory after U.S. export restrictions to China, non-GAAP earnings per share landed at $0.81, or $0.96 when excluding the impact.
Gross margin came in at 60.5% on a GAAP basis, significantly down from 78.4% a year earlier. Nvidia noted it was unable to ship $2.5 billion worth of H20 product due to the licensing change.
The company guided Q2 revenue to $45 billion, plus or minus 2%, even as it anticipates an $8 billion loss in H20-related sales. Nvidia expects to restore gross margins to the mid-70% range by year-end.
CEO Jensen Huang emphasized the global expansion of Nvidia's AI infrastructure, with key developments in Saudi Arabia, the UAE, Japan and the U.S. He said AI token generation has grown tenfold over the past year, underlining AI's shift to essential global infrastructure.
