NVIDIA's Q1 earnings report is a mixed bag, and it is expected that the U.S. chip restrictions in Q2 will result in an $8 billion loss.

Gate News bot message: Chip manufacturing giant Nvidia's first quarter earnings report is mixed. Revenue exceeded Wall Street expectations, but profits fell short of expectations due to U.S. restrictions on its exports to China.

NVIDIA released its financial report for the first quarter of fiscal year 2026, which ended on April 27, on May 28. The report showed that its revenue was $44.1 billion, a 12% increase from the previous quarter and a 69% increase year-over-year, exceeding Zacks analysts' expectations of $42.91 billion by nearly 2.7%.

However, its earnings per share were 81 cents, below analysts' expectations of 85 cents per share. NVIDIA's net profit was 18.8 billion dollars, a year-on-year increase of 26%.

During the earnings call, Nvidia founder and CEO Jensen Huang stated that "the global demand for Nvidia's AI infrastructure is exceptionally strong," as countries begin to recognize that "AI is as critical an infrastructure as electricity and the internet."

He said, "The generation of artificial intelligence reasoning tokens has surged tenfold in just one year, and as AI agents become mainstream, the demand for artificial intelligence computing will accelerate."

NVIDIA stated that the revenue shortfall was due to a $4.5 billion cost incurred from the U.S. government's restrictions on the export of its high-performance H20 artificial intelligence chips to China.

The company stated in its second quarter earnings outlook that it expects revenue to be approximately $45 billion, which "reflects the loss of about $8 billion in H20 revenue due to recent export control restrictions."

According to reports, Nvidia will launch a new low-cost AI chip designed specifically for the Chinese market, which is expected to begin mass production in June.

NVIDIA's data center revenue accounts for a large portion of the company's total revenue, reaching $39.1 billion, a 10% increase from the previous quarter.

Google Finance shows that Nvidia ( NVDA )'s stock price closed down 0.51% on May 28, to $134.81, but after the earnings announcement, the stock price rose 4.89%, to $141.40.

Source: Cointelegraph