Is Nvidia Stock Halal? $3 Trillion AI Giant’s Islamic Investment Status 2025

Analysis, Halal Investment, Stock Investing |

Written by Haider Saleem
Financial and Political Analyst | LinkedIn / X

Nvidia’s latest results confirm its dominance in the AI chip race.

With $44.1 billion in quarterly revenue and a market cap surpassing $3.3 trillion, it is now a central player in shaping global digital infrastructure.

Despite headwinds from new U.S. export restrictions targeting China, Nvidia’s financial momentum continues.

In this article:

1. Why Nvidia is central to the future of AI and token-based computing.
2. A breakdown of its Q1 FY2026 earnings and financial metrics.
3. The impact of U.S.-China trade restrictions on its AI chip sales.
4. Nvidia’s global pivot: sovereign AI deals in the Middle East and beyond.
5. Its current halal investment status – and what that means for ethical investors.
6. Forward-looking commentary on risks and opportunities.

The Infrastructure of Intelligence

Nvidia is no longer just a graphics chipmaker. It is now the foundation layer for artificial intelligence globally. Its AI accelerators – chips that train and run large language models, robotics, and autonomous systems – power modern data centers.

CEO Jensen Huang describes AI as “essential infrastructure,” comparing it to electricity and the internet. The rise of AI agents – systems that can reason and interact – has led to a surge in what’s known as token processing. Each interaction with an AI model involves millions of data units, or “tokens,” which require immense computing power to process. According to Nvidia, this demand has increased tenfold in the past year.

Q1 FY2026 Snapshot: Earnings With a Caveat

For the fiscal quarter ending April 27, 2025, Nvidia reported:

  • Revenue: $44.1 billion (up 69% YoY and 12% QoQ)
  • Data Center Revenue: $39.1 billion (up 73% YoY)
  • Gaming Revenue: $3.8 billion (up 42% YoY)
  • Adjusted Gross Margin: 71.3% (excluding China-related charges)
  • Adjusted EPS: $0.96 (up from $0.60 a year ago)

These figures reflect extraordinary performance, particularly in its Data Center division, now larger than the entire revenue base of many competitors. However, the results came with a major caveat: a $4.5 billion charge linked to unsold inventory and obligations tied to H20 chips, which were designed specifically to meet earlier U.S. export rules before the tighter April restrictions took effect[1].

The China Challenge: Strategic Risk and Realignment

New U.S. export controls imposed in April 2025 halted shipments of Nvidia’s China-specific H20 chips. The company estimated it missed out on an additional $2.5 billion in sales last quarter and expects up to $8 billion in lost revenue for Q2 FY2026[1].

To mitigate these losses, Nvidia is redirecting its focus to regions more open to AI collaboration. CEO Jensen Huang emphasized the risk of ceding the Chinese market to domestic rivals, arguing that “shielding Chinese chipmakers from U.S. competition only strengthens them abroad.”

Geopolitical Growth: Building Sovereign AI Worldwide

To counterbalance the China setback, Nvidia is aggressively expanding its footprint through state-backed AI initiatives — dubbed “sovereign AI.”

Highlights include:

  • Stargate UAE: A next-gen AI cluster in Abu Dhabi with G42, OpenAI, Oracle, SoftBank, and Cisco.
  • HUMAIN (Saudi Arabia): Building national AI factories to power regional AI development.
  • Taiwan: Partnering with Foxconn to produce AI supercomputers.
  • Europe: Upcoming expansion across France, Germany, Belgium, and the UK.

Nvidia’s strategy is more than geographic diversification — it signals a global race to localize AI infrastructure. For many governments, AI is no longer optional; it’s a matter of strategic autonomy.

Halal Status: Ethical Growth in a High-Speed Sector

For Muslim investors seeking high-growth, Shariah-compliant opportunities, Nvidia represents a rare case. According to Musaffa’s stock screening platform, Nvidia is halal under AAOIFI standards as of February 2025.

This means:

  • Its core business activities do not violate Islamic principles.
  • Financial ratios, including interest-based debt and non-permissible income, fall within halal thresholds.

Given Nvidia’s dominance and relatively lean debt profile, it continues to pass most common Shariah filters – see Nvidia’s full halal screening report on Musaffa.

Looking Ahead: Is Nvidia Too Big to Slow Down?

With the Blackwell chip platform – Nvidia’s latest generation of AI processors — entering full production and AI token usage exploding, Nvidia’s near-term trajectory looks strong. The company forecasts $45 billion in Q2 FY2026 revenue despite China losses, suggesting new markets are already compensating for lost ground[1].

Still, Nvidia’s long-term growth will depend on managing geopolitical risk, sustaining innovation, and preserving its dominant margins. For Muslim investors, it remains one of the few companies at the frontier of technology – and within the boundaries of Islamic finance.

NVIDIA Yearly Income Statement’s Performance

Footnotes

[1] Nvidia Corporation, “NVIDIA Announces Financial Results for First Quarter Fiscal 2026,” May 2025. Available via investor.nvidia.com
[2] Financial Times, “Nvidia is a $3tn bet on the tokenisation of everything,” May 29, 2025.
[3] Bloomberg, “Nvidia Gives Upbeat Forecast, Even as China Slowdown Mars Growth,” May 28–29, 2025.
See Nvidia’s full halal screening report on Musaffa.

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