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The Nvidia (NASDAQ: NVDA) share price got a nice lift today (29 May). As I write, it’s 4.2% higher across the pond after the firm released its Q1 2026 earnings.
This puts the legendary chip stock 9% off its 52-week high of $153. Here’s why I think it will soon notch another all-time record.
Walking the walk
There are firms who talk a good game, but their actual results underwhelm. Then there are companies that quietly let their impressive financial results do the talking.
Nvidia does both. As for the talking, CEO Jensen Huang framed Q1 by saying: “Countries around the world are recognising AI as essential infrastructure — just like electricity and the internet — and Nvidia stands at the centre of this profound transformation.”
The results backed this up. Revenue rocketed 69% year on year to $44.1bn, beating expectations, while adjusted earnings per share (EPS) climbed 33% to $0.81. Data Centre revenue, up 73%, totalled $39.1bn.
The Data Centre division understandably hogs the limelight, given that this is where all the exciting AI growth is taking place. But the Gaming and AI PC unit achieved record revenue of $3.8bn, up 42%, while Automotive and Robotics revenue surged 72% to $567m.
So, it would be no exaggeration to say that Nvidia is firing on all cylinders.
That said, the company did take a $4.5bn hit after writing off H20 chip inventory due to new export restrictions to China. Excluding that and a related tax impact, the EPS figure would have been $0.96. The hit was $1bn less than feared as it was able to sell or repurpose some H20 chips.
Looking ahead to Q2, management expects revenue of about $45bn, reflecting an $8bn loss in Chinese revenue from the export curbs.
Chinese competition
It should be noted that the S&P 500 is up today after a US trade court blocked most of President Trump’s ‘Liberation Day’ tariffs from going into effect. Investors are cheering this, though in reality it probably creates even more trade uncertainty.
On the earnings call, Huang said: “Export restrictions have spurred China’s innovation and scale.“
In my mind, the real risk here is not just the loss of the China business, which accounts for about 12.5% of revenue. It’s the real possibility of Chinese chip rivals emerging in future to challenge Nvidia on the global stage.
A BYD to Nvidia’s Tesla, as it were.
Sovereign AI
For now though, Nvidia rules supreme, and the quarter featured the usual parade of top-tier partnerships and cutting-edge innovations.
Nvidia unveiled NVLink Fusion, an interconnect technology that enables partners to build semi-custom AI infrastructure within its broader ecosystem. And joint ventures with General Motors and Alphabet to advance various AI-based initiatives. The list goes on.
Plus, there will be supercomputers built in the US and Taiwan, AI factories in Saudi Arabia, and a colossal 10-square mile AI infrastructure campus in the UAE. Management says Japan, Korea, India, Canada, and much of Europe are now building AI infrastructure.
After rising 29% in May, Nvidia stock isn’t as cheap as it was. But with global demand for the firm’s AI infrastructure “incredibly strong“, and sovereign AI emerging as a new growth engine, I think Nvidia goes higher from here.
Therefore, it’s worth considering for long-term investors.
This story originally appeared on Motley Fool
