Nvidia concedes China market share

Nvidia reported record first-quarter revenue of $81.6 billion on May 20, 2026, extending the surge in spending on artificial-intelligence infrastructure. Data center revenue rose 92% from a year earlier to $75.2 billion, and the company forecast second-quarter revenue of about $91 billion, above Wall Street estimates. Shares slipped in extended trading after the results, even as Nvidia announced an additional $80 billion share repurchase program. In the same set of investor remarks, Chief Executive Jensen Huang said U.S. export controls and China’s domestic push had left Nvidia having “largely conceded” that market, while describing Huawei as “very, very strong.” ### If the quarter was so strong, why did the stock fall? CNBC reported that Nvidia beat expectations on both revenue and adjusted earnings, but investors had been looking for another outsized upside surprise from the company that has become the central supplier to the AI buildout. Nvidia’s adjusted earnings per share were $1.87, compared with analyst expectations of about $1.76, according to CNBC. Reuters reported the shares were marginally down after hours despite the strong guidance. (investor.nvidia.com) The $91 billion second-quarter forecast was above consensus near $87 billion, according to Reuters and other market coverage, but the reaction suggested the bar for Nvidia remains unusually high. The company has become a proxy for the pace of AI capital spending by Microsoft, Amazon, Alphabet and other large cloud customers, making even a beat-and-raise quarter subject to scrutiny over whether growth can keep accelerating. (cnbc.com) ### What exactly did Huang say about China? Jensen Huang told investors that Nvidia had “largely conceded” the China market, according to reports from Investing.com, Benzinga and market transcript coverage after the earnings call. He said Huawei was “very, very strong,” underscoring how U.S. restrictions have reshaped competition in AI chips inside China. (msn.com) Reuters reported that Huang has been arguing that export controls intended to slow China’s AI progress are also creating room for domestic rivals. Nvidia previously disclosed that tighter U.S. licensing rules on its H20 product for China had forced charges tied to excess inventory and purchase obligations, showing that the policy shift was already hitting a product designed specifically for that market. (seekingalpha.com) ### Why does Huawei matter so much here? Huawei is the Chinese company Huang singled out as Nvidia’s most credible local rival. His comments matter because Nvidia once treated China as a major long-term market for AI accelerators, but U.S. rules have limited which chips it can ship there and on what terms. As Nvidia’s access narrowed, Chinese customers had stronger incentives to adopt domestic alternatives. (msn.com) The China issue now sits beside a much larger fact: Nvidia’s core business is still expanding fast enough elsewhere to offset that loss, at least for now. Nvidia said first-quarter total revenue rose 85% from a year earlier, and data center remained by far its largest segment. That combination — rapid global growth and a shrinking China position — is what makes Huang’s comments notable. (seekingalpha.com) ### What is still driving growth outside China? Nvidia told investors that demand for its AI systems continues to come from both hyperscale cloud groups and a widening set of newer customers. Reuters reported Huang said Nvidia expected to grow faster than its largest cloud customers, pointing to AI-focused cloud providers as an expanding part of the data center business. (investor.nvidia.com) The company also used the earnings release to point investors toward its next product cycle. Nvidia said its Vera processor platform is on track for the second half of 2026, and Reuters reported Huang said Vera gives Nvidia access to a new $200 billion market. That product roadmap helps explain why investors are measuring the company not only against the latest quarter, but against how much of the next wave of AI spending it can capture. (money.usnews.com) ### What comes next after these results? May 20 was Nvidia’s first-quarter report for the period ended April 26, 2026, and the company said second-quarter revenue should be about $91 billion, plus or minus 2%. Nvidia’s investor materials also said Vera revenue should begin contributing by the end of the year, giving investors a named product milestone to watch in the next two quarters. (investor.nvidia.com) (theverge.com)