Nvidia's Earnings Triumph Overshadowed by a Smuggling Scandal and a Rare CEO Rebuke

Nvidia posts $81.6B revenue, unveils Vera Rubin platform, and faces compliance scrutiny with partner Super Micro as stock trades below highs.

Nvidia finds itself caught between two powerful forces: a fiscal first quarter that smashed records and a level of compliance scrutiny that has dragged its CEO into an unusually public confrontation with a long-time partner. The tension is playing out in real time as Jensen Huang navigates Taiwan, where he both touted the company's biggest-ever product launch and singled out Super Micro Computer for its regulatory shortcomings.

Shares of Nvidia traded at €188.90 on Monday, up 1.85% on the day but still roughly 6% below the 52-week high of €201.05 reached in mid-May. Over the past year, the stock has climbed more than 60%, yet the forward price-to-earnings ratio of 25 to 33 sits below the sector median of about 34. With a PEG ratio of 0.67, analysts see valuation as lagging behind growth, and the consensus target range of $278 to $307 implies substantial upside from current levels.

A Quarter That Defies Easy Comparison

Revenue for the period ended in April hit $81.6 billion, an 85% surge from the prior year. The data center segment alone contributed $75.2 billion — a 92% jump — and accounted for 92% of total sales. Adjusted earnings per share came in at $1.87, topping consensus estimates of $1.76. Free cash flow reached $48.6 billion, and the gross margin held at 75%.

Capital returns to shareholders accelerated accordingly. The board authorized a new $80 billion stock buyback program and raised the quarterly dividend from $0.01 to $0.25 per share, payable on June 26, 2026.

For the current quarter, Nvidia expects revenue of roughly $91 billion, representing another 95% year-over-year increase. The guidance notably excludes any contribution from China's data center market, where export restrictions remain a barrier.

Vera Rubin, Marvell, and the Next Growth Vector

Huang used his trip to Taipei to preview the Vera Rubin platform, due for first shipments in the third quarter of 2026, with a full ramp in the fourth quarter. He called it "the biggest product launch in Taiwan's history," noting that each NVL72 system comprises nearly two million components sourced from about 150 local partners. The architecture targets AI workloads such as reinforcement learning and agentic AI, and together with the Rubin GPUs, it forms an integrated ecosystem. Compared with the current Blackwell platform, Vera Rubin promises tenfold lower inference costs and a 75% reduction in GPU requirements for training certain models.

Alongside the hardware push, Nvidia deepened its ties with Marvell Technology through a $2 billion investment. The goal is to weave Marvell's custom XPUs and networking solutions into Nvidia's NVLink Fusion platform for AI data centers. Huang expects hyperscaler capital spending to surpass $1 trillion in 2027.

Export Controls and a Partner Under Fire

Yet the most striking moment of Huang's Taiwan visit was not a product announcement. Asked about the legal troubles engulfing Super Micro Computer, a key server builder for Nvidia's chips, Huang said: "Ultimately, Super Micro must run their own company. I hope they will improve their regulatory competence and avoid this kind of thing in the future."

The remark was a departure from his usual reluctance to criticize partners publicly. The context: on May 21, Taiwanese prosecutors raided 12 locations and secured arrest warrants for three suspects, including Super Micro co-founder Wally Liaw. They are accused of using forged customs documents to export Nvidia-equipped servers to China, Hong Kong, and Macau. In a bid to deceive both Nvidia's compliance department and a US export control officer, the suspects allegedly filled a warehouse with thousands of dummy servers and used hairdryers to remove shipping labels so they could assemble counterfeit deliveries.

A parallel federal case in the US charges Liaw and two others with smuggling Nvidia servers worth approximately $2.5 billion. Super Micro CEO Charles Liang has stated that the company itself is neither a defendant nor a target of the grand jury, and that all three accused have been released.

Huang stressed that Nvidia is "rigorous" in educating all partners about export regulations. But the twin investigations on both sides of the Pacific make clear that a significant transshipment loophole — one that enabled the largest export control case in US history — is now being closed. None of the seized shipments have been released.

China: Too Big to Ignore, Too Restricted to Count

Despite the enforcement action, Huang reiterated that China remains "a very important and very large" market. About ten Chinese companies hold export licenses for the H200 chip, but actual deliveries are pending Chinese government approvals. Huang framed the new Vera CPU architecture as a standalone growth driver in a $200 billion addressable CPU market — one that includes China.

For now, however, Nvidia's China data center revenue is effectively zero in its guidance. The gap between long-term ambition and short-term reality underscores the complexity of operating in a bifurcated global semiconductor market. The Super Micro case will test whether Huang needs to tighten his grip on partners even as he expands an ecosystem of 150 Taiwanese suppliers for Vera Rubin.