On June 3, Eastern Time, NVIDIA's stock price rose 2.8% to $141.40, bringing its market capitalization to $3.45 trillion, narrowly surpassing Microsoft ($3.44 trillion) to reclaim the title of the world's most valuable publicly traded company after several months. This milestone was driven by its first-quarter fiscal year 2026 revenue of $44.1 billion (up 69% year-over-year) and net income of $18.8 billion (up 26% year-over-year). However, the shadow of export controls is quietly looming over this AI chip giant.
Financial Highlights and Business Resilience
NVIDIA's core data center business contributed $39.1 billion in revenue (89% of total revenue), up 73% year-over-year, with the launch of the Blackwell architecture further solidifying its dominant position in the AI inference market. The gaming business saw an unexpected rebound, generating $3.763 billion in revenue (up 42% year-over-year), while the automotive business achieved a 72% growth rate, reaching a new high of $567 million, demonstrating the effectiveness of its diversified business strategy. Despite a $4.5 billion charge related to inventory write-downs for H20 chips, which caused the gross margin to plummet from 78.4% to 60.5%, the adjusted gross margin remained at 71.3%, demonstrating strong profitability.
Export Control Impact and Response Strategies
The U.S. indefinite export ban on H20 chips to China has become the biggest variable. NVIDIA estimates it will lose approximately $8 billion in revenue in the second fiscal quarter due to this ban, and the proportion of its data center revenue from the Chinese market has already begun to decline. To address the restrictions, the company is accelerating the launch of a downgraded version of the chip based on the Blackwell architecture, priced at half that of the H20 (USD 6,500–8,000), with mass production expected as early as June. While this move is seen as a "last resort," Jensen Huang made it clear: "The Chinese market is crucial to NVIDIA, and we will do everything in our power to maintain our operations in China."
Market Outlook and Stock Price Volatility
Despite policy risks, NVIDIA has provided a revenue guidance of $45 billion for the second fiscal quarter (with a 2% margin of error) and expects Blackwell chip production capacity to continue to rise. Notably, its stock price has rebounded strongly from the January low, which saw a $600 billion plunge, with the market cap increasing by nearly 24% from the May low. Analysts believe that the explosive growth in AI computing power demand (such as Microsoft processing over 100 trillion tokens) remains the core driver, but uncertainty in the Chinese market could become a long-term concern.
Behind this market capitalization battle lies the deeper strategic competition within the global AI supply chain - NVIDIA's ability to balance technological advantages with geopolitical considerations may determine whether it can continue its legacy as the "Intel of the AI era."