Nvidia’s results confirm it: The AI boom is still going strong

Nvidia sets another record. Q1 results confirm the AI boom is far from over — despite rising regulatory hurdles.

Following Nvidia’s fiscal Q1 2026 results, one thing is certain: the company shows no signs of slowing down and continues to reinforce Wall Street’s conviction that it stands at the epicenter of a global technological revolution. The market’s response was immediate — shares gained over 3% in after-hours trading, breaking above $140 and easing recent fears of a trend reversal.

Revenue came in at a record-breaking $44.1 billion, marking a 12% increase from the previous quarter and a stunning 69% year-over-year jump. Adjusted earnings per share (EPS) reached $0.81, beating the Street’s consensus of $0.73. More importantly, excluding the one-time $4.5 billion charge related to the H20 chip export restrictions to China, EPS would have hit $0.96 and the gross margin would have been an impressive 71.3%.

The data center segment — the undisputed growth engine of the company — brought in $39.1 billion in revenue, up 73% year-over-year, although slightly below the $39.2 billion expected by analysts. Also noteworthy was a record quarter for gaming and AI PCs, with revenue hitting $3.8 billion — nearly a 50% quarter-on-quarter increase.

Cautious guidance met with calm on Wall Street

Despite signaling a more cautious approach to forward guidance — with Q2 revenue expected to reach around $45 billion compared to the $45.9 billion expected — investors didn’t flinch. The caution stems mainly from an anticipated $8 billion hit to Q2 sales from newly tightened U.S. export restrictions to China. Nonetheless, investors appear to believe the "China effect" is peaking, with Nvidia estimating the total impact at around $15 billion. Management aims to return gross margins to the 75% range later this year, and new deals in the Middle East could help offset the loss of Chinese market share.

CEO Jensen Huang’s comments resonate beyond marketing

Huang’s statement that AI is becoming the new “critical infrastructure” — on par with electricity or the internet — was more than PR spin. It captures the scale of the transformation underway, with Nvidia positioned as a central supplier. Mass production of the Blackwell NVL72 supercomputer is underway, and the number of AI inference tokens generated in the past year has surged tenfold. For investors, that’s a clear signal: the AI investment cycle is still accelerating.

Maintaining a technological and operational edge — despite rising global friction

Despite mounting geopolitical tensions and growing trade barriers, Nvidia continues to maintain its edge. Even with its current valuation hovering around 30x forward earnings, the stock still offers upside — as long as the company keeps delivering outperformance like this quarter. More broadly, Nvidia’s success has also re-energized the entire tech sector and the Nasdaq 100 index, which is increasingly underpinned by the AI narrative.

Strategic risks remain — but are largely macro-driven

At this stage, the biggest risks facing Nvidia are strategic and external in nature. A real business slowdown would likely require a broader economic downturn backed by hard data — not just shifts in sentiment. That’s something beyond Nvidia’s control. U.S. tariffs on China remain at 30%, and trade terms with Europe are still unclear. Meanwhile, inflationary pressures in the U.S. could delay any Federal Reserve rate cuts and squeeze consumer demand.

Yet, today’s market is again pricing in an optimistic scenario, treating trade wars as a "resolved" issue. Time will tell whether that’s wishful thinking or rational confidence. One thing is clear for now: the race for AI dominance is on — and Nvidia is firmly leading the charge.

Eryk Szmyd, Financial Markets Analyst at XTB