Nvidia's Earnings: More Than Just Export Restrictions

As Nvidia prepares to report its Q1 FY2026 earnings, many industry watchers are eager to hear how the recent U.S. chip export controls will impact the company's international business. However, according to Kevin Cook, a senior equity strategist at Zacks Investment Research, there may be an even more important factor to pay attention to - Nvidia's rollout of its new GB200 NVL72 hardware.

The GB200 NVL72 is a single-rack exascale computer that includes 72 GPUs and costs around $3 million. Cook notes that despite strong demand and high expectations heading into this year, the chaos around the DeepSeek incident in late January caused many analysts to significantly reduce their delivery estimates for this new system.

Since this is the first quarter the GB200 NVL72 has been shipped, Cook says there isn't yet a clear indicator of how the product is performing. However, he believes the company's guidance on future deliveries will be a key metric to watch. "If Jensen [Huang] says we are going to deliver 10,000 units in Q2, the street will be very impressed," Cook said. "That's a big doable number; 10,000 is $30 billion on a $3 million product."

The adoption rate of the GB200 NVL72 by enterprises could have significant implications for Nvidia's future. Cook wonders whether companies will upgrade their AI hardware each time a new system is released, similar to how consumers upgrade to the latest iPhone annually. If enterprises do exhibit this behavior, it could provide a major boost to Nvidia's business.

While the impact of U.S. export controls on Nvidia's international sales will undoubtedly be closely watched, Cook believes the company's resilience and ability to recover from short-term market reactions is well-established. He argues that as long as Nvidia provides positive guidance on GB200 NVL72 deliveries, any fluctuations in quarterly revenue will be overshadowed by the company's long-term growth prospects.

In the end, the key takeaway is that Nvidia's earnings report may have more to do with the reception of its latest AI hardware than the ongoing geopolitical tensions surrounding semiconductor exports. Investors and industry observers would be wise to pay close attention to the company's guidance on its new exascale computing platform.