Nvidia continued its years-long streak of beating Wall Street's expectations for growth on Wednesday, reassuring most investors that the AI boom, particularly the global explosion of datacenters, will continue apace.
Record Revenue and Earnings
The chip maker reported $81.62bn in revenue for the first quarter of 2026, surpassing analysts' expectations of $78.86bn. Nvidia also exceeded Wall Street forecasts of $1.76 per share, posting earnings of $1.87 per share. A major portion of Nvidia's revenue comes from its datacenter business, which recorded 92% year-over-year growth to a record $75.2bn.
AI Infrastructure Expansion
"The buildout of AI factories – the largest infrastructure expansion in human history – is accelerating at extraordinary speed," said Nvidia CEO Jensen Huang in a statement. "Agentic AI has arrived, doing productive work, generating real value, and scaling rapidly across companies and industries." Many analysts view Nvidia's financial performance as a broader referendum on the AI buildout. US tech giants are collectively planning to spend some $750bn this year on AI infrastructure, a significant portion of which will go towards chips for datacenters. Huang said he expects Nvidia to grow faster than the capital expenditure of hyper-scaled datacenters.
Competition and Market Position
Nvidia, with a $5.4tn market cap, reigns supreme in the semiconductor chip market and has cashed in on big tech's AI aspirations by providing key components, software, and infrastructure. However, the company faces competition from other tech giants such as Amazon and Google in producing chips.
China Market Uncertainty
Huang joined Elon Musk and Donald Trump on Air Force One for a trip to China last week. He expressed hope that Nvidia would expand into China, though it remains unclear whether Chinese officials will agree to use American technology. In December, the Trump administration allowed Nvidia to export H200 AI chips to China, with the US collecting a 25% fee on these sales. "The Chinese government has to decide: how much of their local market do they want to protect?" Huang said in an interview with Bloomberg Television. "My sense is that over time the market will open." However, Nvidia said in its outlook that it does not currently expect datacenter compute revenue from China. CFO Colette Kress reiterated that Nvidia has not generated any revenue from sales of these chips to China and that it is unclear whether any imports will be allowed. Trump has approved sales but said that Xi Jinping had blocked them.
Expansion in Southeast Asia
Nvidia is also trying to expand its footprint in Southeast Asia. On Wednesday, Singapore announced that Nvidia will launch a research hub in the country, focused on increasing the efficiency of AI infrastructure.
Next-Generation AI System
Nvidia announced a new AI system earlier this year, expected to roll out in the second half of 2026. The Vera Rubin platform is claimed to be a "generational leap" that will "kick off the greatest infrastructure buildout in history." "My sense is we will be supply-constrained throughout the entire life of Vera Rubin," Huang said. The CEOs of OpenAI and Anthropic have said Nvidia's infrastructure and ability to keep pace are key for their ability to run powerful models safely and at scale. "The world is rebuilding computing for agentic AI and robotic physical AI. Nvidia sits at the center of these transitions," Huang concluded.
