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Nvidia Earnings: Why NVDA Stock Rallied After Its May 2025 Sales Beat

NVIDIA beat cited revenue expectations for Q1 FY2026, but its EPS figures depend on whether the H20 charge is included. Here’s what the results, Q2 outlook and after-hours stock move showed.
From TheFinanceBase Team3 min to read

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NVIDIA’s first-quarter fiscal 2026 results beat the cited revenue and adjusted-EPS expectations, and NVDA rose after hours on May 28, 2025—even though the shares had closed lower during regular trading. The quarter also included a $4.5 billion H20-related charge tied to new U.S. export restrictions, while the company’s next-quarter outlook reflected a substantial H20 revenue headwind.

Which Nvidia earnings report does this headline describe?

It refers to NVIDIA’s first quarter of fiscal 2026, announced on May 28, 2025, for the three months ended April 27, 2025. It is a historical earnings event, not NVIDIA’s latest report. NVIDIA’s May 28, 2025 results release reported $44.1 billion in revenue, up 69% year over year.

How did revenue and EPS compare with expectations?

NVIDIA’s $44.1 billion in revenue topped the $43.2 billion expectation attributed to S&P Global Market Intelligence by Axios. Axios also cited Bloomberg’s $0.88 adjusted-EPS consensus. The EPS comparison needs care: NVIDIA reported $0.81 in non-GAAP diluted EPS, below that cited consensus, but said non-GAAP diluted EPS would have been $0.96 if the H20 charge and related tax impact were excluded. That charge-excluded figure exceeded the cited $0.88 expectation; it is not the company’s reported non-GAAP EPS. Consensus providers and EPS definitions can differ. Axios’s May 28 coverage provides the cited estimates.

Measure Q1 FY2026 result How to read it
Revenue $44.1 billion; up 69% year over year NVIDIA-reported sales for the quarter.
GAAP diluted EPS $0.76 Per-share earnings calculated under GAAP.
Non-GAAP diluted EPS $0.81 NVIDIA’s reported adjusted figure.
Non-GAAP diluted EPS excluding the H20 charge and related tax impact $0.96 A company-provided adjusted figure that excludes specified costs; it is not the reported $0.81 figure.

NVIDIA also reported $39.1 billion in Data Center revenue, up 73% year over year. The company’s release lists GAAP net income of $18.775 billion and non-GAAP net income of $19.894 billion. CEO Jensen Huang said, “Global demand for NVIDIA’s AI infrastructure is incredibly strong.”

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What caused the H20 charge?

NVIDIA said the U.S. government informed it on April 9, 2025 that a license would be required to export H20 products to China. As demand for H20 diminished under the new requirements, NVIDIA recorded a $4.5 billion charge related to excess inventory and purchase obligations. It also said it could not ship an additional $2.5 billion in H20 revenue during the quarter. These are separate effects: the charge affected reported earnings, while the unshipped amount was revenue NVIDIA said it could not realize in Q1.

What did Nvidia forecast for the next quarter?

For Q2 FY2026, NVIDIA forecast revenue of $45.0 billion, plus or minus 2%, and non-GAAP gross margin of 72.0%, plus or minus 50 basis points. The company said the revenue outlook reflected an approximately $8.0 billion loss in H20 revenue from export-control limitations. This was a forward-looking estimate, not a reported Q1 result.

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When did NVDA stock rally?

The rally cited in the headline happened after the earnings release in extended trading, not during the regular-session close. Reuters reported that NVDA finished the May 28 regular session down 0.5%, then rose 5% after the closing bell. The Associated Press described a gain of more than 4% in extended trading; Axios reported a 4% after-hours rise. These are short-window snapshots reported by different outlets, not one full-day closing return. See Reuters’s May 28 report and the Associated Press report.

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Why might investors have responded positively despite the H20 hit?

The quarter’s sales beat and 69% year-over-year revenue growth offered evidence of continued demand, especially in Data Center, while the charge-excluded EPS figure was above the cited consensus. At the same time, reported non-GAAP EPS was lower than that consensus, and the H20 restrictions weighed on both Q1 shipments and the Q2 outlook. The after-hours rise is consistent with investors weighing the growth and sales beat against those constraints; the contemporaneous figures do not establish that earnings alone caused the share-price move.

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