Key TakeAways From Nvidia Results

Looking at the chart, Nvidia is still stuck in consolidation. It has not reached a new high despite strong results, and the Coppock indicator is falling steeply but is not yet negative. The good news about this chart is that at some time it will turn bullish and the shares will likely be more expensive.

The problem is China.

On April 9th, the U.S. government issued new export controls on H20, our data center GPU designed specifically for the China market. We sold H20 with the approval of the previous administration. Although our H20 has been in the market for over a year and does not have a market outside of China, the new export controls on H20 did not provide a grace period to allow us to sell through our inventory.

In Q1, we recognized $4.6 billion in H20 revenue, which occurred prior to April 9, but also recognized a $4.5 billion charge as we wrote down inventory and purchase obligations tied to orders we had received prior to April 9. We were unable to ship $2.5 billion in H20 revenue in the first quarter due to the new export controls. The $4.5 billion charge was less than what we initially anticipated as we were able to reuse certain materials.

We are still evaluating our limited options to supply data center compute products compliant with the U.S. government’s revised export control rules. Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors in China and worldwide.

Collette Kress, CFO, Nvidia, Q1 2026, 28 May 2025

I agree with Jensen Huang that trying to starve China of GPU chips will weaken US semiconductor companies and lead to the technology being developed in China. It is a shortsighted approach, and a change would benefit Nvidia shares.

Otherwise, the results were excellent and reflect an AI boom in full, even accelerating mode.

The pace and scale of AI factory deployments are accelerating with nearly 100 NVIDIA-powered AI factories in flight this quarter, a two-fold increase year-over-year, with the average number of GPUs powering each factory also doubling in the same period. And more AI factory projects are starting across industries and geographies. NVIDIA’s full stack architecture is underpinning AI factory deployments as industry leaders like AT&T, BYD, Capital One, Foxconn, MediaTek, and Telenor, are strategically vital sovereign clouds like those recently announced in Saudi Arabia, Taiwan and the UAE. We have a line of sight to projects requiring tens of gigawatts of NVIDIA AI infrastructure in the not-too-distant future.

The transition from generative to agentic AI, AI capable of receiving, reasoning, planning and acting will transform every industry, every company and country. We envision AI agents as a new digital workforce capable of handling tasks ranging from customer service to complex decision-making processes.

Collette Kress, CFO, Nvidia, Q1 2026, 28 May 2025

Is that a statement likely to be made by a company whose shares are about to fall? I don’t think so!

Excitement is growing about prospects for robots.

We announced Isaac GR00T N1, the world’s first open fully customizable foundation model for humanoid robots, enabling generalized reasoning and skill development. We also launched new open NVIDIA Cosmos World Foundation models. Leading companies include 1X, Agility Robots — Robotics, Figure AI, Uber and Waabi. We’ve begun integrating Cosmos into their operations for synthetic data generation, while Agility Robotics, Boston Dynamics, and XPENG Robotics are harnessing Isaac’s simulation to advance their humanoid efforts.

GE Healthcare is using the new NVIDIA Isaac platform for healthcare simulation built on NVIDIA Omniverse and using NVIDIA Cosmos. The platform speeds development of robotic imaging and surgery systems.

The era of robotics is here, billions of robots, hundreds of millions of autonomous vehicles and hundreds of thousands of robotic factories and warehouses will be developed.

Collette Kress, CFO, Nvidia, Q1 2026, 28 May 2025

Nvidia also has an accelerating share buyback programme.

In Q1, we returned a record $14.3 billion to shareholders in the form of share repurchases and cash dividends. Our capital return program continues to be a key element of our capital allocation strategy.

Collette Kress, CFO, Nvidia, Q1 2026, 28 May 2025

There is no doubt that China is becoming a critical issue for Nvidia.

On export control: China is one of the world’s largest AI markets and a springboard to global success. With half of the world’s AI researchers based there, the platform that wins China is positioned to lead globally. Today, however, the $50 billion China market is effectively closed to U.S. industry. The H20 export ban ended our Hopper Data Center business in China. We cannot reduce Hopper further to comply. As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed. We are exploring limited ways to compete, but Hopper is no longer an option.

China’s AI moves on with or without U.S. chips. It has to compute to train and deploy advanced models. The question is not whether China will have AI, it already does. The question is whether one of the world’s largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America’s position. Export restrictions have spurred China’s innovation and scale. The AI race is not just about chips. It’s about which stack the world runs on. As that stack grows to include 6G and quantum, U.S. global infrastructure leadership is at stake.

The U.S. has based its policy on the assumption that China cannot make AI chips. That assumption was always questionable and now it’s clearly wrong. China has enormous manufacturing capability. In the end, the platform that wins the AI developers win AI — wins AI. Export controls should strengthen U.S. platforms, not drive half of the world’s AI talent to rivals.

Jensen Huang, CEO, Nvidia, Q1 2026, 28 May 2025

In so many ways, what is happening is huge.

On DeepSeek: DeepSeek and Qwen from China are among the most — among the best open-source AI models. Released freely, they’ve gained traction across the U.S., Europe and beyond. DeepSeek-R1, like ChatGPT, introduced reasoning AI that produces better answers, the longer it thinks. Reasoning AI enables step-by-step problem solving, planning and tool use, turning models into intelligent agents. Reasoning is compute-intensive, requires hundreds to thousands more — thousands of times more tokens per task than previous one-shot inference. Reasoning models are driving a step-function surge in inference demand. AI scaling laws remain firmly intact, not only for training, but now inference too requires massive scale compute.

DeepSeek also underscores the strategic value of open-source AI. When popular models are trained and optimized on U.S. platforms, it drives usage, feedback and continuous improvement, reinforcing American leadership across the stack. U.S. platforms must remain the preferred platform for open-source AI. That means supporting collaboration with top developers globally, including in China. America wins when models like DeepSeek and Qwen runs best on American infrastructure.

Jensen Huang, CEO, Nvidia, Q1 2026, 28 May 2025

The AI revolution is sweeping the world.

Regarding onshore manufacturing: President Trump has outlined a bold vision to reshore advanced manufacturing, create jobs and strengthen national security. Future plants will be highly computerized in robotics. We share this vision. TSMC is building six fabs and two advanced packaging plants in Arizona to make chips for NVIDIA. Process qualification is underway with volume production expected by year-end. SPIL and Amkor are also investing in Arizona, constructing packaging, assembly and test facilities. In Houston, we’re partnering with Foxconn to construct a 1 million square foot factory to build AI supercomputers. Wistron is building a similar plant in Fort Worth, Texas. To encourage and support these investments, we’ve made substantial long-term purchase commitments, a deep investment in America’s AI manufacturing future. Our goal from chip to supercomputer built in America within a year. Each GB200 NVLink72 racks contains 1.2 million components and weighs nearly 2 tons. No one has produced supercomputers on this scale. Our partners are doing an extraordinary job.

On AI diffusion rule: President Trump rescinded the AI diffusion rule, calling it counterproductive, and proposed a new policy to promote U.S. AI tech with trusted partners. On his Middle East tour, he announced historic investments. I was honored to join him in announcing a 500-megawatt AI infrastructure project in Saudi Arabia and a 5-gigawatt AI campus in the UAE. President Trump wants U.S. tech to lead. The deals he announced are wins for America, creating jobs, advancing infrastructure, generating tax revenue and reducing the U.S. trade deficit.

The U.S. will always be NVIDIA’s largest market and home to the largest installed base of our infrastructure. Every nation now sees AI as core to the next industrial revolution, a new industry that produces intelligence and essential infrastructure for every economy. Countries are racing to build national AI platforms to elevate their digital capabilities. At COMPUTEX, we announced Taiwan’s first AI factory in partnership with Foxconn and the Taiwan government. Last week, I was in Sweden to launch its first national AI infrastructure. Japan, Korea, India, Canada, France, the U.K., Germany, Italy, Spain, and more are now building national AI factories to empower startups, industries and societies. Sovereign AI is a new growth engine for NVIDIA.

Jensen Huang, CEO, Nvidia, Q1 2026, 28 May 2025

The more I read about what is happening, the more I draw the obvious conclusion. You must own Nvidia shares.

probably the best way to think through it is that AI is several things. Of course, we know that AI is this incredible technology that’s going to transform every industry, from, of course, the way we do software to healthcare and financial services to retail to, I guess, every industry, transportation, manufacturing. And we’re at the beginning of that.

But maybe another way to think about that is where do we need intelligence, where do we need digital intelligence? And it’s in every country, it’s in every industry. And we know because of that, we recognize that AI is also an infrastructure. It’s a way of developing a technology — delivering a technology that requires factories and these factories produce tokens. And they, as I mentioned, are important to every single industry and every single country. And so, on that basis, we’re really at the very beginning of it, because the adoption of this technology is really kind of in its early, early stages.

Now, we’ve reached an extraordinary milestone with AIs that are reasoning, are thinking, what people call inference time scaling. Of course, it created a whole new — we’ve entered an era where inference is going to be a significant part of the compute workload.

But anyhow, it’s going to be a new infrastructure, and we’re building it out in the cloud. The United States is really the early starter and available in U.S. clouds. And this is our largest market, our largest installed base, and we continue to see that happening.

But beyond that, we’re going to have to — we’re going to see AI go into enterprise, which is on-prem, because so much of the data is still on-prem. Access control is really important. It’s really hard to move all of — every company’s data into the cloud. And so, we’re going to move AI into the enterprise.

And you saw that we announced a couple of really exciting new products, our RTX Pro Enterprise AI server that runs everything enterprise and AI, our DGX Spark and DGX Station, which is designed for developers who want to work on-prem. And so, enterprise AI is just taking off.

Telcos, today, a lot of the telco infrastructure will be in the future software-defined and built on AI. And so, 6G is going to be built on AI, and that infrastructure needs to be built out. And as said, it’s very, very early stages.

And then, of course, every factory today that makes things will have an AI factory that sits with it. And the AI factory is going to be — drive creating AI and operating AI for the factory itself, but also to power the products and the things that are made by the factory. So, it’s very clear that every car company will have AI factories. And very soon, there’ll be robotics companies — robot companies, and those companies will be also building AIs to drive the robots.

And so, we’re at the beginning of all of this build-out.

Jensen Huang, CEO, Nvidia, Q1 2026, 28 May 2025

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Strategy – Buy US Wealth Creators, Pray For Change In The UK

In Saturday’s Daily Telegraph, there is a column by a journalist called Sam Ashworth-Hayes, headlined ‘Britain is Sleepwalking into Total State Control of our Daily Lives’. Half tongue-in-cheek, he suggests that despite a brief period of resistance under Margaret Thatcher, Britain has effectively lost the Cold War, and our freedoms are being steadily eroded.

Although many individuals are trying to fight back, it seems that somehow the bureaucrats always prevail, and the state grows larger and larger. At this rate, the UK government, endlessly piling up more debt, will soon be spending sums equal to half the GDP of the national economy. Why on earth would anyone think that is a good idea? You might as well put FIFA in charge.

The most likely reason this trend is so remorseless is Universal Suffrage, which was introduced between 1918 and 1929. Before 1914, an Englishman could live his entire life only encountering the state in the form of postmen and policemen, and Britain was at a peak of power and prestige, an example to the world.

Universal Suffrage introduces a new dynamic, especially in a mindset where lower-paid workers can self-diagnose as unable to work and therefore needing state support. They can join forces with the lower-paid and the bloated public sector to sequester money from the higher-paid, more energetic, successful members of the population. Why would they not do this? It is a no-brainer and is likely to be pursued to the point where the more successful and energetic members of society start to leave.

This is where we are, with wealthy individuals fleeing the country in growing numbers, even to such unlikely places as Dubai. Better the desert than England’s green and pleasant land. The UK economy and economies in much of Europe have ground to a halt and have been flatlining for decades. This may at last be producing a revulsion of feeling with both traditional parties incredibly unpopular.

Reform UK and Nigel Farage have the huge advantage of articulating the resentment of much of the voting public and never having formed a government. I have never voted Labour and can’t imagine ever again voting for the Tories. The Lib Dems, the Reducto Ad Absurdum of everything that is wrong with the modern political economy, will never remotely be contenders except with the sort of mindless twits who voted in Mark Carney in Canada.

This leaves Reform UK as the only game in town and the next election as theirs to lose, even in the unlikely event of Labour and the Conservatives ganging up against them.

If I were advising Nigel Farage, I would tell him to put all his efforts into securing funding for his fledgling party and building the strongest possible organisation. I would say the minimum about policy because he intends to form a pragmatic government which will take the measures needed in the light of circumstances to deliver the desired result, a more dynamic economy, with lower taxes and a smaller state sector.

Since the war, the two most successful prime ministers have been Thatcher, who freed up the UK economy and Blair, who positioned himself as the heir to Thatcher and said, inter alia, that he had no problem with people becoming rich. Why should he, when Adam Smith tells us that individual success benefits everybody? Everyone else has been disastrous, although the derided Liz Truss at least had the right instincts.

Part of the problem with Universal Suffrage is that it encourages politicians to buy votes with ever-higher taxes and endlessly rising borrowings. I hope we can break free of this vicious circle, but maybe we are doomed. The unlikely figure of Farage seems to be our last, best hope.