Nvidia Corporation is at an exciting crossroads as it gets ready to reveal its first-quarter fiscal 2026 earnings on May 28, 2025. What started as a company known mainly for gaming graphics cards has now become the backbone of the global AI revolution. But with recent ups and downs in its stock price and ongoing geopolitical challenges, investors are wondering: Is Nvidia still a smart buy? Let’s dive into Nvidia’s journey so far this year, what to expect in the upcoming earnings, and the factors shaping its future, all you need to know before deciding on this stock.

Nvidia’s 2025 So Far: A Rollercoaster Ride

Nvidia’s stock has seen some volatility in 2025, slipping about 5% year-to-date by late May. The year began with a shakeup when China’s startup DeepSeek launched a cheaper AI model, challenging the massive AI spending assumptions by tech giants. On top of that, Microsoft hinted it might slow AI investments in data centers, raising doubts about Nvidia’s growth pace.

Trade restrictions under the Trump administration have severely impacted Nvidia. Export bans on specialized chips to China caused CEO Jensen Huang to reveal a loss of nearly $15 billion in sales. Nvidia recently took a $5.5 billion write-off on H20 inventory that was intended for the Chinese market, marking a significant financial setback. Despite these challenges, Nvidia remains financially strong with $38.5 billion in cash and only $8.5 billion in debt.

The company is expanding into Saudi Arabia and the UAE, which, along with the easing of some trade restrictions by U.S. President Donald Trump, has created positive momentum. Options traders are pricing in possible stock movements of up to 7.4% following the earnings report, reflecting continued excitement and volatility.

What To Watch in Nvidia’s Upcoming Earnings

Nvidia’s earnings report will be watched closely for clues about the company’s short-term performance and long-term plans. The company has a solid history of beating earnings expectations and raising future guidance, although the “beat-and-raise” surprises have become more moderate as analysts catch up. The big questions: How will Nvidia navigate geopolitical hurdles while riding the AI wave? Supply constraints still limit growth in the U.S., and expanding globally is crucial to make up for lost revenue in China. CEO Jensen Huang’s insights on competition and customer diversification will be vital.

Revenue and Earnings Forecasts

Wall Street expects a record-breaking $43.3 billion in revenue for Q1 fiscal 2026, representing a 66% increase from $26 billion last year, although slower than the 262% growth seen in the previous year. Earnings per share (EPS) estimates range around $0.73, up from $0.61 year-over-year, with some analysts predicting an adjusted EPS as high as $0.88 (a 44% increase). Remember, the $5.5 billion H20 inventory write-off will affect reported numbers, but the core business remains strong. Historically, Nvidia investors who bought shares before earnings and held for a year saw median returns of 120% over the last decade. But, as always, past gains don’t guarantee future results.

Data Center Revenue

Nvidia’s data center segment is its shining star, growing from $3 billion in 2020 to a massive $115 billion in 2025. Recent quarters ended with $35.6 billion revenue and an annualized run rate of $142 billion. Morningstar’s models predict $40 billion for April 2025 but lowered July estimates from $44 billion to $37.6 billion due to China trade restrictions. Supply issues still limit how much Nvidia can deliver, but analysts expect about $4 billion more growth each quarter through 2026, fueled by better supply and ongoing AI adoption. How well Nvidia can keep growing depends on AI investment trends and expanding its customer base beyond the usual cloud giants.

AI Demand: The Heart of Nvidia’s Growth

AI remains the key driver behind Nvidia’s success. Its GPUs dominate AI training and inference workloads, while the CUDA software platform creates strong loyalty and switching costs that protect Nvidia’s lead. However, challenges like DeepSeek’s AI model and debates about AI investment growth raise questions about how long this boom will last. Nvidia has a unique view of AI trends across many industries. The upcoming earnings call will reveal if AI spending is cooling or still thriving. Growing beyond cloud providers into governments and Middle Eastern markets could open new doors for Nvidia.

Blackwell AI Chip: The Next Big Thing

Nvidia’s new Blackwell chip architecture promises major performance leaps over the current Hopper chips. The timing and success of this launch are crucial as competitors push their own chips. Blackwell is not just about revenue; it shows Nvidia’s commitment to innovation and keeping its top spot in AI infrastructure. However, meeting supply and demand will be key, since Nvidia’s new chip generations always face huge demand. A strong Blackwell launch could help Nvidia offset losses from China and keep it as the top AI infrastructure provider.

Competition is Heating Up

The AI chip market is fast-evolving. Cloud giants like Amazon, Google, Microsoft, and Meta are building their own chips. AMD is aggressively growing its GPU line, and Intel is also entering AI accelerators. Nvidia’s strength goes beyond hardware. Its software, networking, and services create a tough ecosystem to beat. But big customers want to avoid relying on just one supplier, which poses challenges. Nvidia must keep innovating and maintain software advantages to stay ahead and justify premium prices.

Macroeconomic and Geopolitical Headwinds

Trade tensions between the U.S. and China are Nvidia’s biggest macro challenge. Export controls shut out China’s huge AI market, causing $15 billion in lost sales. Meanwhile, China is building its own semiconductor industry, which adds competitive pressure. There are broader risks too, including supply chain issues and Taiwan’s geopolitical tensions affecting Nvidia’s chip manufacturing with TSMC.

Nvidia’s move into the Middle East aims to diversify, but these markets are smaller than China’s. Global economic conditions and higher interest rates could slow AI investments, but Nvidia’s customers are generally well-funded and resilient.

Expert and Market Views

Morningstar gives Nvidia a 3-star “fairly valued” rating with a $125 fair value estimate, implying the current $132-$135 stock price might be slightly high. However, if geopolitical risks ease or AI demand stays strong, the fundamental value could rise. Wall Street remains mostly positive, with strong revenue expectations but slower growth than before. Analysts focus on managing supply limits, competition, and geopolitics while keeping premium pricing.

Options markets suggest Nvidia’s stock will stay volatile after earnings. Historically, buying before earnings and holding for a year has paid off well, but changing global conditions may make the past less reliable.

Final Take

Nvidia looks like a strong buy going into earnings thanks to solid fundamentals and AI leadership. Record revenue estimates highlight ongoing demand, and despite the $5.5 billion China write-off, Nvidia remains a top player in next-gen computing. Still, risks from geopolitics, export bans, and fierce competition remain. The stock’s upside depends on Nvidia’s ability to keep innovating and navigate a more complex world.