Chase the Surge in Nvidia Stock After Q1 Earnings?

Despite reporting mixed Q1 results Wednesday evening, Nvidia NVDA stock has pooped as much as +6% in today’s trading session and had retaken the top spot as the market’s most valuable company ahead of Microsoft MSFT.Briefly hitting a market cap of $3.44 trillion, Nvidia’s superior Blackwell series GPUs have powered its data center growth and AI factory build-outs, which are driving significant revenue for the chip giant. That said, let’s see if the surge in NVDA will continue or if there are still better buying opportunities ahead.Image Source: Zacks Investment Research Nvidia’s Q1 Results Enduring what it called a challenging operating environment, Nvidia’s Q1 sales of $44.06 billion topped estimates of $42.91 billion and soared 69% from $26.04 billion a year ago. Data Center revenue was the main contributor, increasing 73% year over year to $39 billion.However, Q1 EPS of $0.81 missed expectations of $0.85 despite spiking 33% from $0.61 a share in the prior period. Nvidia has surpassed sales estimates for a remarkable 25 consecutive quarters and his exceeded earnings expectations in three of its last four quarterly reports with an average EPS surprise of 3.87%.Image Source: Zacks Investment Research H20 HeadwindsWatering down Nvidia’s bottom line was the U.S. government's export controls on its H20 data center GPU, which is designed specifically for the market in China. While Nvidia was previously able to sell its H20 AI chips to China with no restraints, the Trump administration now requires a license to do so, leading to a $4.5 billion charge due to excess inventory and purchase obligations.Nvidia hasn’t publicly disclosed the exact cost of obtaining the license, but CEO Jensen Huang has criticized the export controls, stating they will weaken the U.S. chip industry and unintentionally strengthen Chinese competitors. Notably, Huang sees Huawei Technologies as a formidable AI rival and has pointed out that Tencent Holdings TCEHY and other major Chinese tech companies are shifting toward domestic alternatives to power their AI endeavors due to restrictions on U.S. chip exports. Nvidia’s Revenue Guidance For the second quarter, Nvidia expects Q2 sales to be $45 billion, plus or minus 2%. This falls within range of the current Zacks Consensus of $45.29 billion or 51% growth (Current Qtr below), and includes a projected loss in H20 revenue of approximately $8 billion.Based on Zacks' estimates, Nvidia’s total sales are expected to increase 49% in its current fiscal year 2026 to $194.7 billion from $130.5 billion in FY25. Furthermore, FY27 sales are projected to rise another 24%.Image Source: Zacks Investment Research Conclusion & Final Thoughts For now, Nvidia stock lands a Zacks Rank #3 (Hold). Seeing as NVDA has rallied nearly +30% in the last month, there could be better buying opportunities ahead, especially considering export headwinds to China.Although Nvidia's data center growth is very appealing to investors, Jensen Huang has reiterated, that as one of the world’s leading AI markets, China will be crucial to its global success, stating the platform that wins China is positioned to lead globally.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NVIDIA Corporation (NVDA): Free Stock Analysis Report Microsoft Corporation (MSFT): Free Stock Analysis Report Tencent Holding Ltd. (TCEHY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks