NVIDIA Crushes Earnings with Blackwell Surge as China Risks Grow

NVIDIA (NVDA) just wrapped up another blockbuster quarter, racking up $44.1 billion in revenue for Q1 fiscal 2026 — a 69% jump from a year ago. That would be impressive under any circumstances, but even more so given the $4.5 billion hit the company took from unsold chips in China. This was supposed to be the quarter where geopolitical headwinds blew harder than ever. Instead, NVIDIA’s Blackwell chip architecture caught the wind and took flight.

China blocked, While AI booms

CEO Jensen Huang isn’t pretending everything is fine, though. “You cannot underestimate the importance of the Chinese market,” he said in an interview with Bloomberg. “This is the home of the world’s largest population of AI researchers.” The company expects to miss out on $8 billion in revenue next quarter due to new U.S. export restrictions, a staggering loss that’s already priced into the Q2 forecast. Despite this, NVIDIA is guiding for $45 billion in revenue, holding steady in the face of its largest market being essentially off-limits.

The engine behind all this is inference. AI applications — from chatbots to autonomous robots — aren’t just training anymore; they’re running full steam, processing tokens, images, voice, and decisions in real time. “The demand is just off the charts,” Huang said. “Inferencing has just become a giant workload.” That surge is powering demand for NVIDIA’s chips, especially the new Blackwell platform, which is now shipping and scaling globally.

Blackwell isn’t just another chip — it’s a full-stack system. NVIDIA is now selling its AI infrastructure as entire computing solutions, not just processors. “We designed it to be a thinking machine,” Huang said of the new architecture. “It’s a home run.” The vertical approach is helping the company deepen relationships with hyperscalers, cloud platforms, and governments, which increasingly view AI as critical infrastructure.

_{Datacenter revenue, fueled by Blackwell, has become NVIDIA’s growth rocket, eclipsing all other segments as China fades from the frame. Source: Main Street Data.}

Huawei’s Rise Complicates the Victory Lap

While NVDA shares are rising about 8% in premarket trading after earnings (as of writing), not everything in the report was smooth sailing. The data center unit posted $39.1 billion in revenue, just below analysts’ expectations. That segment alone is larger than most semiconductor firms. Gaming, a former cornerstone, delivered a surprising upside with $3.8 billion in revenue, boosted by the upcoming Nintendo Switch 2 and Blackwell-powered GPUs.

Still, the China issue looms large. Huang acknowledged that Huawei’s latest AI chip is “probably comparable to an H200.” It’s a rare admission — not just of competition, but of how quickly China is closing the gap. “They look for ways to compete. And they’re quite formidable,” he added.

At the same time, Huang praised the very policies that helped reshore NVIDIA’s supply chain. “The idea of tariffs being a pillar of a bold vision to reindustrialize… that’s just an incredible vision,” he said of Donald Trump’s economic agenda. “We’re all in on the idea.” It’s a tightrope act — applauding U.S. manufacturing while trying to soften the blow of losing Chinese market access.

For now, NVDA continues to deliver. Even with billions lost in China, its Q2 guidance and ongoing demand for Blackwell suggest the AI boom has plenty of fuel left. “We just have to have the confidence to go compete,” Huang said. “And if we have the confidence to compete, we will win.”

Is NVDA stock a Good Buy?

According to The Street’s analysts, Nvidia has a Strong Buy rating and an average NVDA stock price target of $165.29. This implies a 22.61% upside.

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