Nvidia Shares Surge Following Strong Q1 Earnings Report

Shares of Nvidia (NASDAQ: NVDA) surged on Thursday, rising 3.9% by 10:30 a.m. ET and previously hitting a 6.4% gain earlier in the day. This uptick follows a 0.3% gain in the S&P 500 (SNPINDEX: ^GSPC) and a 0.4% increase in the Nasdaq Composite (NASDAQINDEX: ^IXIC).

Nvidia reported its Q1 2026 earnings after the market closed yesterday, exceeding Wall Street’s expectations once again.

Strong Earnings from Nvidia

For Q1 2026, Nvidia posted earnings per share (EPS) of $0.96 on revenues of $44.06 billion, surpassing consensus estimates of $0.93 EPS on $43.31 billion in sales.

Year-over-year revenue rose 69%, increasing from $26 billion in Q1 2025, primarily driven by a 73% growth in the lucrative data center segment, which now constitutes 88% of total revenue.

CEO Jensen Huang remarked on the strong demand for Nvidia’s AI chips, stating, “Global demand for Nvidia’s AI infrastructure is incredibly strong.”

Image source: Getty Images.

Impact of Restrictions on China Sales

Nvidia claimed that its impressive quarter could have been even better without sales restrictions in China. The Trump administration mandated that Nvidia obtain an export license to sell its modified H20 processors to Chinese firms, citing security concerns.

This policy change resulted in $4.5 billion in charges for Nvidia and reduced its gross margin to 61%, a decline from the 71.3% it would have achieved without these restrictions.

Nvidia’s Continued Market Strength

Despite challenges related to China, Nvidia’s demand remains robust in other regions. The company continues to perform strongly, and while growth rates may not reach last year’s peaks, they remain adequate to affirm its current valuation.

Investment Considerations for Nvidia

Potential investors should note the following before purchasing Nvidia shares:

Currently, the Motley Fool analyst team has identified ten other stocks they recommend for investment, which do not include Nvidia. These stocks have potential for significant returns in the near future.

Historical performance shows that an investment of $1,000 in Netflix on December 17, 2004 would now be worth $651,761. Similarly, an investment in Nvidia on April 15, 2005 would now be approximately $826,263.

Johnny Rice does not own shares in any of the companies mentioned. The Motley Fool has positions in and recommends Nvidia.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.