Nvidia reported record revenue of $81.62 billion for the first quarter of 2026, surpassing analysts' expectations of $78.86 billion, fueled by strong demand for AI infrastructure [1, 2]. Datacenter revenue rose 92% year-over-year to $75.2 billion, reflecting the rapid buildout of AI systems across multiple industries [1]. Earnings per share reached $1.87, beating the forecast of $1.76 per share [1].

CEO Jensen Huang said, "The buildout of AI factories – the largest infrastructure expansion in human history – is accelerating at extraordinary speed. Agentic AI has arrived, doing productive work, generating real value, and scaling rapidly across companies and industries" [1]. Nvidia announced an $80 billion stock repurchase program alongside the earnings release [2].

Shares rose modestly by 0.7% ahead of the report and climbed further afterwards, powering gains across the chip sector [3, 4, 5]. Earlier in the week, semiconductor indexes had gained up to 7.8% as investors weighed AI optimism with market risks [3, 4]. However, broader Wall Street indexes had fallen for several days due to inflation fears, rising Treasury yields, and Middle East tensions pushing oil prices above $110 per barrel [6, 7, 8]. The US 10-year Treasury yield reached its highest level since January 2025, around 4.68%, stoking concerns about Federal Reserve rate hikes [6, 7, 8].

Geopolitical risks from the Iran conflict added to market anxiety and kept oil prices elevated, limiting broader stock gains, according to Michael James of Rosenblatt Securities: "As long as there is nothing happening along those fronts, oil is remaining high, bond yields are remaining high, and the market’s anxiety levels are getting increasingly elevated" [7].

Investor sentiment in tech stocks showed rotation, with gains in software shares and some fluctuations in chip stocks amid the rising yields environment [9, 6]. Analysts and investors viewed Nvidia's results as a key test of sustained AI demand. Edward Jones economist James McCann said, "The expectation is that Nvidia's earnings will be strong. The bar continues to rise for some of these companies. Can it continue to beat that bar?" [3].

Despite US export approvals, Nvidia faces uncertainty expanding in China due to Chinese government restrictions [1]. Nvidia's forecast for Q2 sales was $91 billion, which drew a tepid reaction from some investors, seen as below very high expectations amid growing AI chip competition [2]. Still, market optimism around AI and tech momentum remained evident ahead of earnings, with chip stocks rallying sharply [3, 4].

After Nvidia CEO Jensen Huang promoted AI and robotics outlooks on May 21, Asian tech stocks rallied [5]. European and emerging market stocks also showed gains last week, supported in part by easing Middle East tensions and AI-driven rallies [10, 11]. The US 10-year Treasury yield and oil prices will remain key economic indicators to watch in coming weeks [6, 7, 8].