Why Nvidia Stock Is Soaring Today

Core Viewpoint - Nvidia's stock surged following the release of its Q1 2026 earnings, which exceeded Wall Street expectations, driven by strong demand for its AI-enabling chips [1][2]. Financial Performance - Nvidia reported earnings per share (EPS) of $0.96 on sales of $44.06 billion, surpassing consensus estimates of $0.93 EPS on $43.31 billion in sales [2]. - Revenue grew 69% year over year, increasing from $26 billion in Q1 2025, primarily due to a 73% year-over-year growth in the data center segment, which now constitutes 88% of total revenue [2]. Demand and Market Position - CEO Jensen Huang emphasized the robust global demand for Nvidia's AI infrastructure, indicating that the demand for its AI-enabling chips remains exceptionally high [3]. - Despite challenges in the Chinese market, Nvidia's overall demand remains strong, suggesting continued growth potential [8]. Challenges and Impact - Nvidia faced restrictions on sales to China, requiring an export license for its H20 processors, which impacted its sales and profitability [5]. - The company incurred $4.5 billion in charges due to these policy changes, resulting in a gross margin of 61%, lower than the 71.3% it would have reported without the restrictions [6]. Future Outlook - Although growth rates may not match the peak levels of the previous year, the ongoing demand in other markets is sufficient to support Nvidia's current valuation [8].