Background on Nvidia and its Relevance
Nvidia, a leading American manufacturer of microprocessors and graphics cards, recently reported its financial results for the first fiscal quarter, which spans February to April. The company’s net income reached a staggering $18.775 billion (€16.531 billion), marking a 26.2% increase compared to the same period in the previous fiscal year.
Revenue Growth Across Key Segments
Nvidia’s total revenue for the quarter amounted to $44.062 billion (€38.795 billion), representing a 69.2% increase from the same period last year and surpassing the company’s expectations.
- Data Centers: The data center business grew by 73% year-over-year, reaching $39.100 billion (€34.426 billion).
- Gaming and AI for PCs: The gaming and artificial intelligence (AI) for PC segment achieved a record-breaking $3.800 billion (€3.346 billion), a 42% increase from the previous year.
Impact of Export Licensing Requirements on Nvidia’s Performance
Due to new export licensing requirements imposed by the U.S. government on Nvidia’s H20 products for the Chinese market, the company incurred an extraordinary charge of $4.500 billion (€3.962 billion) in the first quarter of fiscal year 2026. This charge was associated with excess H20 inventory and purchase obligations due to decreased demand.
Nvidia reported that sales of H2O products totaled $4.600 billion (€4.050 billion) during the first quarter of fiscal year 2026, prior to the new export licensing requirements. The company estimates it could not generate an additional $2.500 billion (€2.201 billion) in H2O revenue during the same period.
Nvidia’s Outlook for the Second Fiscal Quarter
Looking ahead, Nvidia anticipates revenue to reach $45.000 billion (€39.621 billion) in the second fiscal quarter, with a potential variation of 2%.
- Gross Margins: Nvidia expects gross margins to be 71.8%, an increase of 50 basis points, emphasizing its ongoing efforts to achieve gross margins close to 70% by the end of this year.
- Operating Expenses: The company anticipates operating expenses to be around $5.700 billion (€5.018 billion) and projects that operating expense growth for fiscal year 2026 will be around 30%.
Key Questions and Answers
- Q: What is Nvidia and why is it relevant?
A: Nvidia is a prominent American manufacturer of microprocessors and graphics cards. Its relevance stems from its significant impact on the technology industry, particularly in data centers, gaming, and artificial intelligence. - Q: How did Nvidia perform financially in the first quarter?
A: Nvidia reported a net income of $18.775 billion (€16.531 billion) in the first quarter, a 26.2% increase from the same period last year. - Q: What drove Nvidia’s revenue growth?
A: The data center business grew by 73% year-over-year, reaching $39.100 billion (€34.426 billion), while the gaming and AI for PC segment achieved a record-breaking $3.800 billion (€3.346 billion), a 42% increase from the previous year. - Q: How did export licensing requirements affect Nvidia’s performance?
A: New U.S. government export licensing requirements for Nvidia’s H20 products in the Chinese market led to an extraordinary charge of $4.500 billion (€3.962 billion) in the first quarter of fiscal year 2026, due to excess inventory and decreased demand. - Q: What are Nvidia’s revenue and gross margin projections for the second fiscal quarter?
A: Nvidia anticipates revenue to reach $45.000 billion (€39.621 billion) in the second fiscal quarter, with gross margins expected to be 71.8%, an increase of 50 basis points. - Q: How does Nvidia expect its operating expenses to perform in fiscal year 2026?
A: Nvidia projects operating expenses to be around $5.700 billion (€5.018 billion) in fiscal year 2026, with operating expense growth expected to be around 30%.
