Nvidia Faces $10.5 Billion Revenue Hit from H20 Chip Export Restrictions Amid Record Q1 Earnings

Nvidia expects to lose billions in revenue due to H20 chip licensing requirements | TechCrunch

As Nvidia reports earnings for the first quarter of its fiscal year 2026, which closed on April 28, the company has released numbers on how the Trump administration's recent chip export restrictions are affecting business. Nvidia reported that it incurred a $4.5 billion charge in Q1 due to licensing requirements impacting its ability to sell its H20 AI chip to companies in China. The chipmaker also reported that it was unable to ship an additional $2.5 billion of H20 revenue in the quarter due to the restrictions. When the U.S. licensing requirement was originally announced in April, the company said that it expected $5.5 billion in related charges for Q1. Nvidia also said Wednesday that the H20 licensing requirements will result in an $8 billion hit to the company's revenue in Q2, which is predicted to be around $45 billion -- a significant toll. The company has been outspoken against the Trump administration's push to limit the export of U.S.-made AI chips to countries including China. Huang praised the administration's recent decision to scrap Joe Biden's Artificial Intelligence Diffusion Rule that would have imposed further chip export restrictions. Despite Biden's chip export rules not coming to bear, Nvidia is clearly not immune to the Trump administration's attempt to stifle China's AI market. TechCrunch will update this story as we learn more.

Nvidia posts record $44 billion revenue, H20 export ban bites as gaming rises

Nvidia on Wednesday disclosed its financial results for the first quarter of its fiscal 2026, posting revenue of $44.062 billion, its best quarter ever. The company's sales increased almost across the board both in terms of quarter-over-quarter and year-over-year comparisons. As the company ramped up its Blackwell GPUs, it also set revenue records both for gaming and datacenter revenues. However, the recent shipments ban of H20 GPUs to China hurt Nvidia's margins quite significantly. For the first quarter of fiscal 2026, Nvida reported GAAP revenue of $44.062 billion, marking a 12% rise quarter-over-quarter (QoQ) and a 69% increase year-over-year (YoY). The company's gross margin fell sharply to 60.5%, primarily due to a $4.5 billion charge related to writing down of H20 inventory due to the latest U.S. export restrictions imposed in early April. Without the charge, Nvidia's non-GAAP margin would have been 71.3%, still considerably lower than 78.9% in Q1 FY2025 or 73.5% in Q4 FY2025. Nvidia's operating income was $21.6 billion, down 10% from the prior quarter but up 28% year-over-year, as for net income, it reached $18.8 billion, a 15% sequential decline but a 26% increase from the same period a year ago. Nvidia's data center revenue set a new record $39.112 billion, comprising of $34.155 billion compute revenue and $4.957 billion networking revenue. The result represented a 10% quarter-over-quarter growth and 73% year-over-year growth, driven by surging global demand for AI infrastructure. Nvidia does not provide split between sales of Blackwell and Hopper AI GPUs as well as Blackwell and Hopper systems, but it said that transition to Blackwell, has been almost complete. This means that while there are still some customers interested in Hopper processors, the vast majority of its clients now want Blackwell products. In addition, the company highlighted strong momentum in Blackwell-based systems as NVL72 GB200 machines ramped to full-scale production during the quarter. "Our breakthrough Blackwell NVL72 AI supercomputer -- a 'thinking machine' designed for reasoning -- is now in full-scale production across system makers and cloud service providers," said Jensen Huang, founder and CEO of Nvidia. "Global demand for Nvidia's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate." Nvidia's gaming products also achieved a record-breaking revenue of $3.8 billion -- a 48% increase from the previous quarter and a 42% rise YoY -- in the first quarter of FY2025. This growth was driven by multiple factors, including insufficient gaming GPU shipments in the previous quarter as well as launch of Nvidia's mainstream GeForce RTX 5070 and 5060-series products based on the Blackwell architecture. As for OEM and other segment, it generated $111 million, down 12% sequentially but up 42% year-over-year. Nvidia's professional vizualization (ProViz) business reported revenue of $509 million, down from $511 million QoQ, but up 19% from $427 million in the same quarter a year go. Such results may indicate that workstation makers continued to purchase Ada Lovelace-based professional graphics cards despite the imminent release of Blackwell-based RTX Pro graphics boards in May, perhaps because of uncertainities with the U.S. tariffs. It is noteworthy that sales of Nvidia's client and professional GPUs -- which are reported under gaming, ProViz, OEMs, and other monikers -- totaled $4.42 billion, which is lower than sales of Nvidia's networking gear. Nvidia's automotive and robotics segment earned $567 million, down from $570 million in the previous quarter, but up a whopping 72% from $329 million in Q1 FY2025. For the second quarter of fiscal 2026, Nvidia expects revenue of approximately $45.0 billion ± 2%. The company's Q2 revenue outlook could have been $8.0 billion higher if there was no H20 export restrictions. However, the company projects GAAP gross margins of 71.8% and Nvidia's goal is to reach mid-70% gross margins later in the year. This recovery reflects improving product mix and normalization after the Q1 inventory charge related to unsellable H20 units. Operating expenses in Q2 FY2026 are projected to be around $5.7 billion on a GAAP basis. The vast majority of that sum will be used for research and development (R&D).

Trump trade policy to cost Nvidia $10.5B in lost revenues

US export controls blocking the sale of Nvidia's H20 GPUs to will cost the company $10.5 billion in lost revenues in the first half of the 2026 fiscal year, executives revealed on Wednesday's Q1 earnings call. The export rules, which went into effect in April, effectively cut Nvidia off from the Chinese datacenter market, but not before it managed to deliver roughly $4.6 billion of planned $7.1 billion worth of H20 shipments expected for Q1. According to CFO Colette Kress, Nvidia missed out on $2.5 billion in H20 sales in Q1, and will shave another $8 billion off its Q2 revenues. China's AI moves on with or without US chips On top of the revenues lost to the US-China trade war, Nvidia also booked a $4.5 billion charge in Q1 related to H20 inventory and purchase commitments that it can no longer realize. The situation could have been worse, Kress noted. Nvidia initially expected to write off $5.5 billion, but ended up being able to salvage about $1 billion. Speaking on Wednesday's call, CEO Jensen Huang praised the US president Donald Trump for investing in US manufacturing and the decision to scrap the Biden administration's AI diffusion rules, which would have cost Nvidia even more by capping exports of AI chips to most of the world. However, on China, Huang rehashed many of his talking points from his Computex Q&A last week, warning that US trade policy could backfire. "China's AI moves on with or without US chips. It has the compute to train and deploy advanced models. The question is not whether China will have AI; It already does. The question is whether one of the world's largest AI markets will run on American platforms," Huang said. "Shielding Chinese chip makers from US competition only strengthens them abroad and weakens America's position." With that said, Nvidia clearly hasn't given up on the Chinese market. "We are exploring limited ways to compete, but Hopper is no longer an option," Huang said of the H20 accelerator. And while he declined to offer specifics of future chips for the Chinese market, the company is reportedly preparing a cut down version of its RTX Pro 6000 cards for buyers in the Middle Kingdom. In spite of the geoeconomic headwinds, Nvidia's Q1 delivered $18.8 billion in profits on revenues that surged 69 percent YoY and 12 percent from last quarter to $44.1 billion. Hyperscalers are each deploying 72,000 Blackwell GPUs per week Unsurprisingly, the lion's share of those revenues came from Nvidia's datacenter division, which pulled in $39.1 billion for the quarter, an increase of 73 percent YoY and 10 percent over the prior quarter. "Blackwell contributed nearly 70% of data center compute revenue in the quarter, with a transition from Hopper nearly complete," Kress said. "On average, major hyperscalers are each deploying nearly 1,000 NVL72 racks, or 72,000 Blackwell GPUs, per week and are on track to further ramp output this quarter." Nvidia's other segments also saw solid growth during the first quarter. Gaming revenues topped $3.8 billion, up 42 percent YoY, on the launch of lower-end 50-series graphics hardware. Professional visualization hit $509 million, up 19 percent during the quarter, while Nvidia's automotive and robotics division grew 72 percent YoY to $567 million. Looking ahead to Q2, Nvidia had hoped to pull in revenues of $53 billion, but thanks to changes in US trade policy, the chip biz is now forecasting sales of $45 billion give or take a percent or two. You can pore over the full earnings release here should you be so inclined. Despite the China troubles, the market sent Nvidia stock up nearly five percent after hours, as investors perhaps realized the hit wouldn't be as bad as feared. ®

Nvidia quarterly revenue surges nearly 70% on AI boom

Nvidia reported a nearly 70 per cent surge in quarterly revenues, as the boom in spending on artificial intelligence chips continued despite rising economic uncertainty and export controls that have dented the chip company's China sales. Nvidia on Wednesday reported revenue of $44.1bn for the quarter to April 27, up 69 per cent year on year and above Wall Street's expectations of $43.3bn. But the US chip designer at the heart of a global spending spree on the infrastructure powering AI said it expected revenue of $45bn for the current quarter, plus or minus 2 per cent, slightly below Bloomberg consensus estimates of $45.5bn. Nvidia chief executive Jensen Huang said the company was seeing "incredibly strong" demand for its products. The company is navigating the impact of US President Donald Trump's trade war with China, as well as new export restrictions in April that have prevented it from selling AI chips designed specifically for the China market. Nvidia shares were up almost 3 per cent in after-hours trading immediately following the announcement. Net income jumped by 26 per cent to $18.8bn, slightly below estimates of $19.5bn. Adjusted gross margins -- a measure of profitability that excludes operating expenses -- were 71.3 per cent, in line with the 71 per cent the company said it expected at its last earnings report in February and what Wall Street had been expecting. Nvidia's margins slipped earlier this year with the company citing the transition to its more complex and higher-cost Blackwell chip systems, which launched last year. Nvidia and its suppliers have recently resolved technical issues with Blackwell servers that threatened to delay the rollout. Ahead of the results, analysts had warned that new China sales restrictions would bring margins down further for the quarter. The company is contemplating how to redesign its chips to serve the Chinese market while complying with the latest US export controls.

Nvidia forecasts second-quarter revenue below estimates

May 28 (Reuters) - Nvidia (NVDA.O), opens new tab forecast second-quarter revenue below market estimates on Wednesday, expecting a major hit to sales from tighter U.S. curbs on exports of its AI chips to key semiconductor market China. The artificial intelligence market bellwether expects revenue of $45 billion, plus or minus 2%, in the second quarter, compared with analysts' average estimate of $45.90 billion, according to data compiled by LSEG. Reporting by Arsheeya Bajwa in Bengaluru and Stephen Nellis in San Francisco; Editing by Shounak Dasgupta Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Artificial Intelligence

All eyes on China restrictions as Nvidia gets set to report results

Jensen Huang, co-founder and CEO of Nvidia Corp., speaks during a news conference in Taipei on May 21, 2025. Nvidia continues to see massive growth from sales of graphics processors, with demand for artificial intelligence infrastructure showing no signs of cooling. But for the AI chipmaker, the mood is different heading into Wednesday's earnings report than it's been in recent quarters. There's one big reason why: China. On April 9, the Trump administration sent Nvidia a letter, and said it was requiring an export license for the company's H20 chip, a version of its Hopper processor specially designed for the Chinese market to comply with previous U.S. restrictions. Dating back to President Biden's term, the U.S. government has been concerned that AI chips from Nvidia and other semiconductor companies like Advanced Micro Devices can be used to create supercomputers for adversaries' military purposes. Following the new restrictions, Nvidia said it would take a $5.5 billion writedown on inventory. Analysts called it the biggest writedown in the history of the chip industry. The potential impact on future revenue is hefty. "This inventory write-off implies a $15 billion H20 revenue hit on a rolling 12-month basis," wrote David O'Connor, an analyst at BNP Paribas, in a report on Tuesday. For the quarter ended in April, analysts expect Nvidia to report 66% revenue growth to $43.28 billion, according to LSEG. While that level of growth is much higher than the kind of expansion at any of Nvidia's megacap peers, it marks a sharp deceleration from a year ago, when the company recorded growth of over 250%. Because of the new export license requirements, there's a lot of uncertainty surrounding projections for the rest of the year. The average analyst estimate is predicting growth in the current quarter of 53%, with similar a number expected for the full fiscal year, which ends in January. Morgan Stanley analysts wrote in a report on Tuesday that Nvidia faces a bigger hit than expected. "While our thinking at the time was that this was at least partly expected by the management team, it became clear after the ban that the company had been getting indications that H20 would be OK, and that they were materially surprised," the analysts wrote. Nvidia shares have bounced back of late after a rough start to the year and are now up about 1% in 2025, while the Nasdaq is down about 1%.

Nvidia CEO Jensen Huang hammers chip controls that 'effectively closed' China market

As pleased as Wall Street was with Nvidia's quarterly results on Wednesday, CEO Jensen Huang said the company is leaving billions of dollars in revenue on the table because it can no longer sell to China. "The $50 billion China market is effectively closed to U.S. industry," Huang told analysts at the beginning of his prepared remarks on the earnings call. "As a result, we are taking a multibillion-dollar writeoff on inventory that cannot be sold or repurposed." Even without access to the world's second-biggest economy, Nvidia reported 69% year-over-year revenue growth to $44 billion in the fiscal first quarter, topping analysts' estimates. The stock rose about 4% in extended trading to a level that would be the highest since January if it stays there on Thursday. Nvidia shares are now up for the year, after a difficult start to 2025, adding to a rally that lifted the company's market cap by almost 240% in 2023 and over 170% last year. Still, Huang is making his displeasure with the China situation quite clear. In April, the Trump administration told Nvidia that its previously approved H20 processor for China would require an export license, which effectively cut off sales with "no grace period," the company said on Wednesday. The U.S. government has highlighted the national security concerns of having Nvidia's sophisticated AI chips sold to a chief adversary. The H20 was introduced by Nvidia after the Biden administration restricted AI chip exports in 2022. It's a slowed-down version intended to comply with U.S. export controls.

3 key takeaways from Nvidia's earnings: China blow, cloud strength and AI future

China could be a $50 billion market for Nvidia, but U.S. export controls are getting in the way Nvidia expects to sell about $45 billion in chips during the July quarter, it revealed on Wednesday, but that's missing about $8 billion in sales that the company would have recorded if not for the U.S. restricting exports of its H20 chip without a license. Nvidia also said that it missed out on $2.5 billion in sales during the April quarter thanks to the export restrictions on H20. In prepared remarks, Nvidia CEO Jensen Huang said that China represented a $50 billion market that had effectively been closed to Nvidia. He also said that the export controls were misguided, and would merely encourage Chinese AI developers to use homegrown chips, instead of making an American platform the world's choice for AI software. "The U.S. has based its policy on the assumption that China cannot make AI chips. That assumption was always questionable, and now it's clearly wrong," Huang said. He said that export controls were driving AI talent to use chips from homegrown Chinese rivals, such as Huawei. Nvidia said it didn't have a replacement chip for China ready, but that it was considering options for "interesting products" that could be sold in the market. Strength in the company's Blackwell business balanced out some concerns over the China impact. "NVIDIA is putting digestion fears fully to rest, showing acceleration of the business other than the China headwinds around growth drivers that seem durable. Everything should get better from here," said Morgan Stanley analyst Joseph Moore.

Nvidia weathers tariff uncertainty as revenues surge

Nvidia was the last major tech firm to report during a strong earnings season for tech companies whose shares have surged in recent weeks. Tech stocks, including Nvidia, had previously plummeted in April amid uncertainty over US President Trump's tariff policies. On Wednesday, Nvidia said it had incurred a $4.5bn charge during the quarter as demand for its China-specific "H20" products waned. Nvidia's initial forecast for that charge was significantly higher - at $5.5bn - a month ago. Washington restricted the sale of those chips, which are difficult to sell outside of China, in April. Changes in global trade policies loomed large in the company's forecast. New export controls and tariffs have increased the complexity and cost of its supply chain, and may continue to do so, the company said. Nvidia said it planned to increase manufacturing in the United States to strengthen the company's supply chain. Last week, Mr Huang criticised the US rules blocking exports of advanced computing chips to China. The controls were put in place following concerns that chip technology with potential military uses could be deployed by companies loyal to China's communist party. Mr Huang blasted the policies as a "failure" and said they were backfiring against American companies. Meanwhile, the Financial Times reported Wednesday that President Trump was ordering US chip software suppliers to stop selling their products to Chinese chip companies. The move is intended to make it more difficult for China to develop its own advanced chips that would compete with Nvidia's. "The China export restrictions underscore the immediate pressure from geopolitical headwinds," according to Emarketer analyst Jacob Bourne. Sustaining dominance would require Nvidia to navigate "an increasingly complex landscape of geopolitical, competitive, and economic challenges," Bourne added. At the same time, Nvidia has benefitted from the emergence of new buyers among governments in the Gulf states. Earlier this month, Mr Huang travelled with President Trump to the Middle East where the company said it would sell hundreds of thousands of its AI chips in Saudi Arabia. "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation," Mr Huang wrote after the earnings announcement. Sales in Nvidia's key data centre business grew 73% on an annual basis.

Nvidia's Revenue Jumps to $44.1 Billion Despite A.I. Chip Controls

Sign up for the On Tech newsletter. Get our best tech reporting from the week. Get it sent to your inbox. Nvidia's business prospects have been whipsawed by the U.S. government lately. Last month, the government blocked the sale of artificial intelligence chips to China. Weeks later, it approved the sale of similar chips to the Middle East. Amid the turmoil, Nvidia still maintained its breakneck growth as the leading provider of the computer chips used for building artificial intelligence. Nvidia said on Wednesday that sales in its most recent quarter rose 69 percent to $44.1 billion from a year earlier. Its net income rose 26 percent to $18.78 billion. The company exceeded Wall Street's expectations for sales of $43.28 billion, but fell short of predictions for a profit of $19.49 billion. Nvidia's revenue and profit rose despite it saying on Wednesday that the Trump administration's restrictions on chips to China would cost it $4.5 billion, a billion dollars less than it had estimated in mid-April. The restrictions have pushed Nvidia out of the market for A.I. chips in China, the world's largest buyer of semiconductors, which are used to power smartphones, cars and other electronics. Nvidia also projected that revenue in the current quarter would rise 50 percent from a year ago to $45 billion, as it expands sales of its newest A.I. chip, Blackwell. The sales forecast is in line with Wall Street's prediction of $45.75 billion, suggesting that the tech industry's embrace of artificial intelligence is in its early stages, with ample room to run. Want to stay updated on what's happening in China? Sign up for Your Places: Global Update, and we'll send our latest coverage to your inbox. Shares in Nvidia rose more than 4 percent in after-hours trading. It finished the trading day as the second-most-valuable company in the world behind Microsoft and ahead of Apple, with a market value of $3.3 trillion. "Countries around the world are recognizing A.I. as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the center of this profound transformation," Jensen Huang, the company's chief executive, said in a statement. The company is showing its strength, even among the tech industry's largest companies. For the first time in the A.I. era, its quarterly sales surpassed those of Meta, the social media pioneer. Nvidia's net income was 13 percent larger than Meta's profit in their most recent quarters. Nvidia has been the early winner in the tech industry's race to develop artificial intelligence. Mr. Huang cornered the market on A.I. chips by being the first chipmaker to develop the software and servers that would train A.I. systems to recognize images and predict words. But government officials have grown increasingly alarmed about the way A.I. could be used by adversaries like China to develop autonomous weapons and coordinate military strikes. Those worries have led Washington officials to crackdown on Nvidia's sales. Explore Our Coverage of Artificial Intelligence OpenAI Unites With Jony Ive in $6.5 Billion Deal to Create A.I. Devices Will Writing Survive A.I.? This Media Company Is Betting on It. Create your free account and enjoy unlimited access -- free for 7 days. Start free trial Nvidia's Chief Says U.S. Chip Controls on China Have Backfired A Tech Hub's Plan to Upgrade for the A.I. Age Runs Into Trump's Tariffs A.I.-Generated Reading List in Chicago Sun-Times Recommends Nonexistent Books At Amazon, Some Coders Say Their Jobs Have Begun to Resemble Warehouse Work How Miami Schools Are Leading 100,000 Students Into the A.I. Future Agatha Christie, Who Died in 1976, Will See You in Class Mr. Huang spent much of the past few months pushing back on that by traveling the world to meet with government officials. An April meeting with President Trump proved to be unsuccessful when the Commerce Department later pushed forward on limiting sales to China. Mr. Huang later flew to Beijing, where he pledged to find a new way to sell chips there, and then to Taiwan, where he complained that the U.S. government's restrictions had been a failure. His efforts haven't changed the trajectory of Nvidia's business in China. Since the U.S. government began restricting chip exports, Nvidia's sales in China have been cut to 13 percent of total revenue from 21 percent two years ago. But Mr. Huang has had more success in persuading the U.S. government to loosen up sales to other countries. After his urging, the Trump administration rolled back Biden-era rules that restricted A.I. chip sales abroad. The change paved the way to a blockbuster deal this month between the United States and the United Arab Emirates to build the world's largest international hub of A.I. data centers. Nvidia has made selling more chips to governments a key part of its strategy. The company relies on customers like Microsoft, Amazon, Google and Meta for a large portion of its sales. It wants to expand its customer base by adding buyers across Europe, Asia and the Middle East, where Mr. Huang has said A.I. could be part of the national infrastructure much like a telecommunications network. The United States also doesn't have the energy resources to support the current demand for data centers. The maximum amount of power available this year for many companies is 50 megawatts, enough to support about 25,000 of Nvidia's newest A.I. chips. By comparison, OpenAI is planning a 200-megawatt data center next year at an A.I. campus in Abu Dhabi that could support 100,000 of Nvidia's chips. The deal was important because Nvidia has a window to sell to countries before competition for A.I. chips increases, said Holger Mueller, principal analyst at Constellation Research, a tech research firm. "Now they're the only game in town," Mr. Mueller said of Nvidia. "These Middle East countries really need them."

NVIDIA Announces Financial Results for First Quarter Fiscal 2026

NVIDIA (NASDAQ: NVDA) today reported revenue for the first quarter ended April 27, 2025, of $44.1 billion, up 12% from the previous quarter and up 69% from a year ago. On April 9, 2025, NVIDIA was informed by the U.S. government that a license is required for exports of its H20 products into the China market. As a result of these new requirements, NVIDIA incurred a $4.5 billion charge in the first quarter of fiscal 2026 associated with H20 excess inventory and purchase obligations as the demand for H20 diminished. Sales of H20 products were $4.6 billion for the first quarter of fiscal 2026 prior to the new export licensing requirements. NVIDIA was unable to ship an additional $2.5 billion of H20 revenue in the first quarter. For the quarter, GAAP and non-GAAP gross margins were 60.5% and 61.0%, respectively. Excluding the $4.5 billion charge, first quarter non-GAAP gross margin would have been 71.3%. For the quarter, GAAP and non-GAAP earnings per diluted share were $0.76 and $0.81, respectively. Excluding the $4.5 billion charge and related tax impact, first quarter non-GAAP diluted earnings per share would have been $0.96. "Our breakthrough Blackwell NVL72 AI supercomputer -- a 'thinking machine' designed for reasoning -- is now in full-scale production across system makers and cloud service providers," said Jensen Huang, founder and CEO of NVIDIA. "Global demand for NVIDIA's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation." NVIDIA will pay its next quarterly cash dividend of $0.01 per share on July 3, 2025, to all shareholders of record on June 11, 2025. Highlights NVIDIA achieved progress since its previous earnings announcement in these areas: CFO Commentary Commentary on the quarter by Colette Kress, NVIDIA's executive vice president and chief financial officer, is available at https://investor.nvidia.com. Conference Call and Webcast Information NVIDIA will conduct a conference call with analysts and investors to discuss its first quarter fiscal 2026 financial results and current financial prospects today at 2 p.m. Pacific time (5 p.m. Eastern time). A live webcast (listen-only mode) of the conference call will be accessible at NVIDIA's investor relations website, https://investor.nvidia.com. The webcast will be recorded and available for replay until NVIDIA's conference call to discuss its financial results for its second quarter of fiscal 2026. Non-GAAP Measures To supplement NVIDIA's condensed consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, non-GAAP other income (expense), net, non-GAAP net income, non-GAAP net income, or earnings, per diluted share, and free cash flow. For NVIDIA's investors to be better able to compare its current results with those of previous periods, the company has shown a reconciliation of GAAP to non-GAAP financial measures. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation expense, acquisition-related and other costs, other, gains/losses from non-marketable and publicly-held equity securities, net, interest expense related to amortization of debt discount, H20 excess inventory and purchase obligation charges, and the associated tax impact of these items where applicable. The inclusion of H20 excess inventory and purchase obligation charges in the reconciliations to adjust the related GAAP financial measures was a result of the U.S. government informing NVIDIA on April 9, 2025 that it requires a license for export to China of H20 products. H20 products were designed primarily for the China market. Free cash flow is calculated as GAAP net cash provided by operating activities less both purchases related to property and equipment and intangible assets and principal payments on property and equipment and intangible assets. NVIDIA believes the presentation of its non-GAAP financial measures enhances the user's overall understanding of the company's historical financial performance. The presentation of the company's non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the company's financial results prepared in accordance with GAAP, and the company's non-GAAP measures may be different from non-GAAP measures used by other companies.

Nvidia beats estimates for Q1 results as revenues rise 69% from a year ago

Nvidia, the AI and graphics chip company driving societal changes with AI, reported revenue for the first quarter ended April 27, 2025, was $44.1 billion, up 12% from the previous quarter and up 69% from a year ago. On April 9, 2025, the U.S. government told Nvidia that a license is required for exports of its H20 products into the China market. As a result of these new requirements, Nvidia incurred a $4.5 billion charge in the first quarter of fiscal 2026 associated with H20 excess inventory and purchase obligations as the demand for H20 diminished. Sales of H20 products were $4.6 billion for the first quarter of fiscal 2026 prior to the new export licensing requirements. Nvidia was unable to ship an additional $2.5 billion of H20 revenue in the first quarter. Excluding the $4.5 billion charge, first quarter non-GAAP gross margin would have been 71.3%. For the quarter, GAAP and non-GAAP earnings per diluted share were $0.76 and $0.81, respectively. Excluding the $4.5 billion charge and related tax impact, first quarter non-GAAP diluted earnings per share would have been 96 cents. Analysts expected net income of 75 cents a share on Q1 revenue of $43.2 billion. "Our breakthrough Blackwell NVL72 AI supercomputer -- a 'thinking machine' designed for reasoning -- is now in full-scale production across system makers and cloud service providers," said Jensen Huang, founder and CEO of Nvidia, in a statement. "Global demand for Nvidia's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the center of this profound transformation." Nvidia shareholders got a scare when DeepSeek emerged. Back on January 27, Nvidia's stock fell 17%, losing $600 billion in market value, after investors worried that DeepSeek's efficient AI models might reduce the demand for Nvidia's high-margin AI hardware. But the stock has recovered since that time. Nvidia downplayed the concerns and during the quarter announced a number of new products during the Computex trade show in Taiwan last week. In its outlook for the second quarter, Nvidia said it expects revenues to be $45 billion, plus or minus 2%. This reflects a loss in H20 revenue of $8 billion due to the export control limitations. GAAP and non-GAAP gross margins are expected to be 71.8% and 72.0%, respectively, plus or minus 50 basis points. The company is continuing to work toward achieving gross margins in the mid-70% range late this year. GAAP and non-GAAP operating expenses are expected to be approximately $5.7 billion and $4.0 billion, respectively. Full year fiscal 2026 operating expense growth is expected to be in the mid-30% range. Data Center revenues First-quarter revenue was $39.1 billion, up 10% from the previous quarter and up 73% from a year ago. Nvidia announced it is building factories in the U.S. and working with its partners to produce Nvidia AI supercomputers in the U.S. It also introduced Nvidia Blackwell Ultra and Nvidia Dynamo for accelerating and scaling AI reasoning models. And it announced a partnership with HUMAIN to build AI factories in the Kingdom of Saudi Arabia to drive the next wave of artificial intelligence development. Also in the Middle East, it unveiled Stargate UAE, a next-generation AI infrastructure cluster in Abu Dhabi, United Arab Emirates, alongside strategic partners G42, OpenAI, Oracle, SoftBank Group and Cisco. The company said it plans to work with Foxconn and the Taiwan government to build an AI factory supercomputer. It also announced joint initiatives with Alphabet and Google to advance agentic AI solutions, robotics and drug discovery. And it revealed that Nvidia Blackwell cloud instances are now available on AWS, Google Cloud, Microsoft Azure and Oracle Cloud Infrastructure. Gaming and AI PC First-quarter gaming revenue was a record $3.8 billion, up 48% from the previous quarter and up 42% from a year ago. Nvidia also announced the GeForce RTX 5070 and RTX 5060, bringing Blackwell graphics to gamers at prices starting from $299 for desktops and $1,099 for laptops. And it said Nvidia DLSS 4 is now available in over 125 games, including Black Myth Wukong, DOOM: The Dark Ages, Indiana Jones and the Great Circle, Marvel Rivals and Star Wars Outlaws. It also noted the Nintendo Switch 2, which is launching on June 5, is powered by an Nvidia processor and AI-powered DLSS, delivering up to 4K gaming. And it launched the Nvidia RTX Remix modding platform, attracting over two million gamers, alongside the release of the Half-Life 2 RTX demo. Professional Visualization First-quarter revenue was $509 million, flat with the previous quarter and up 19% from a year ago. Announced the Nvidia RTX PRO Blackwell series for workstations and servers. The company unveiled Nvidia DGX Spark and DGX Station™ personal AI supercomputers powered by the Nvidia Grace Blackwell platform. Nvidia announced that leading industrial software and service providers Accenture, Ansys, Databricks, SAP, Schneider Electric with ETAP, and Siemens are integrating the Nvidia Omniverse platform into their solutions to accelerate industrial digitalization with physical AI. Automotive and Robotics First-quarter Automotive revenue was $567 million, down 1% from the previous quarter and up 72% from a year ago. The company announced a collaboration with General Motors on next-generation vehicles, factories and robots using Nvidia Omniverse, Nvidia Cosmos and Nvidia Drive AGX. It also announced Nvidia Isaac GR00T N1, the world's first open humanoid robot foundation model, followed by Nvidia Isaac GR00T N1.5; Nvidia Isaac GR00T-Dreams, a blueprint for generating synthetic motion data; and Nvidia Blackwell systems to accelerate humanoid robot development.

Wall Street expects growth from Nvidia even as Trump nixes $15bn in revenue

The chip-manufacturing company, widely seen as a bellwether for AI business, is expected to report its earnings Nvidia is set to report its first quarter earnings after the bell on Wednesday. The company is a bellwether for the business of artificial intelligence, both in its cutting-edge hardware and the new regulatory headwinds it is facing, and investors will be watching closely. Wall Street expects the company to report $43.3bn in revenue, up 66% year over year, and adjusted earnings per share of 73 cents. There's no company more important to "the markets and global investor sentiment" than the high-flying chipmaker, according to Wedbush Securities analysts. Nvidia's quarterly reports for the past year have shown explosive growth and is expected to beat Wall Street expectations Wednesday. The company may provide guidance that underwhelm investors for the first time in two years, though. Donald Trump's April announcement that the administration was tightening export rules on computer chips effectively banned Nvidia from selling its H20 AI chips to China, a major source of revenue. The company revealed in a recent SEC filing that the change would cost the company $5.5bn in charges. In an interview with Ben Thompson, the Nvidia CEO Jensen Huang said the move was "deeply painful" and could result in $15 bn in revenue loss. "No company in history has ever written off that much inventory," Huang said. "[N]ot only am I losing $5.5bn - we wrote off $5.5bn - we walked away from $15bn of sales and probably ... $3bn worth of taxes." The tightening rules on chip exports comes as the committee on China within the US Congress announced it was seeking answers from Nvidia about how its chips ended up powering breakthrough AI models in China, particularly DeepSeek, an AI company that matched the products of US AI companies without the same computing power. The committee alleges in a new report that China-based DeepSeek "covertly funnels American user data to the Chinese Communist party, manipulates information to align with CCP propaganda, and was trained using material unlawfully obtained from U.S". Analysts are bracing for what this could mean for the next few quarters. "Next year will be interesting since there is uncertainty from the geopolitics (ie export controls, tariffs, negotiations), despite strong demand for its data center products (Hopper and Blackwell chips)," said Alvin Nguyen, a senior analyst at Forrester. While in previous quarters, analysts were looking to see how much the company would surpass investor expectations this quarter the considerations are more tame, according to a Wedbush Securities analyst's note. "This quarter its more about strong numbers and the ability to maintain guidance despite the China blockade," the note reads. "Investors are more laser focused on the medium term and long-term outlook from Jensen as the China situation could quickly change depending on the ongoing US/China trade negotiations." While the company's business in China remains up in the air, analysts seem heartened by recent demand for Nvidia chips in Saudi Arabia and the UAE. Nvidia was among the beneficiaries of the AI windfall that arose from Trump's visit to the region, which resulted in Saudi Arabia committing to $600bn to US companies. Nvidia said it will sell hundreds of thousands of AI chips to Saudi Arabia, including 18,000 of its latest chip, Blackwell, to a Saudi Arabian sovereign wealth-fund backed startup called Humain.

Nvidia under pressure to show growth despite Trump tariffs

Why it matters: With U.S. export restrictions for AI chips tightening, Nvidia finds itself in a revenue pickle -- trying to maintain as much business as possible in China while appeasing the American government. The big picture: "The big question for tomorrow is what type of dent has the Trump H20/China business played in Nvidia's global demand and outlook going forward," Wedbush Securities analyst Dan Ives writes in a research note, referring to an Nvidia AI chip. Catch up quick: Nvidia CEO Jensen Huang argued last week that U.S. chip export controls have been "a failure," with their biggest impact being the erosion of Nvidia's competitive position. State of play: Nvidia's stock has been on a roller coaster ride this year. By the numbers: S&P Global Market Intelligence analysts are projecting revenue of $43.2 billion and net income of $20.3 billion. What we're watching: Whether Nvidia comments on the impact of AI chip spending announcements connected to President Trump's recent trip to the Middle East.

Nvidia's earnings surged but chip export restrictions dealt a blow

Why it matters: Nvidia has become a bellwether stock for the AI economy as tech companies invest heavily in product development and data center capability, powering Nvidia's rise. By the numbers: The company Wednesday posted revenue of $44.1 billion for its first quarter, up 69% from a year ago and beating S&P Global Market Intelligence expectations of $43.2 billion. Threat level: Nvidia warned that it expects to lose about $8 billion in second-quarter revenue from the loss of sales of H20 chips due to U.S. export control restrictions. Catch up quick: Nvidia CEO Jensen Huang argued last week that U.S. chip export controls have been "a failure," with their biggest impact being the erosion of Nvidia's competitive position. The impact: Nvidia shares rose 2.9% in after-hours trading before the company's earnings call at 5pm ET.

Nvidia to release cheaper Blackwell AI chip in China to work around U.S. restrictions: Report

Nvidia's (NVDA) delicate dance in China continues. Amid U.S. export restrictions on its advanced AI chips, the chip giant valued at $3.3 trillion is reworking its product line -- again -- to maintain its hold on one of its most important markets without crossing Washington. Reuters (TRI), citing unnamed sources familiar with the matter, reported that the company is preparing to release a stripped-down version of its popular Blackwell AI chips that have been specifically designed to comply with U.S. export rules. The news comes days before Nvidia prepares to release its first-quarter 2025 earnings. The Blackwell-based, China-only chip will reportedly cost from $6,000 to $8,000 and use conventional GDDR7 memory, a step down from the high-bandwidth tech in Nvidia's flagship models. The previous H20 chips offered in the country sold for between $10,000 and $12,000. This coming chip also would ditch packaging in technology from Taiwan Semiconductor Manufacturing Co. (TSM) An Nvidia spokesperson told Reuters that the company is looking at its "limited" options: "Until we settle on a new product design and receive approval from the U.S. government, we are effectively foreclosed from China's $50 billion data center market." This isn't Nvidia's first regulatory rodeo. After the U.S. blocked chip exports to China in 2022, the company responded with watered-down versions. When those got swept up in restrictions in late 2023, Nvidia developed chips with further reduced performance to comply with regulations. And that regulatory merry-go-round has continued. In April, Nvidia took a $5.5 billion charge after the U.S. government moved to block exports of the company's H20 AI chips to China. Now, Nvidia is hoping that this China-specific chip variant will thread the needle. CEO Jensen Huang has been increasingly vocal about his frustrations with U.S. policy. At an event earlier this month, he called the export controls "a failure," saying they've only accelerated China's push to develop domestic AI hardware -- sidelining U.S. players in the process. Tech has become the next battleground in the trade war between the U.S. and China. As a result of Nvidia's export restrictions, Chinese telecommunications giant Huawei is gaining ground with its AI chips, which are quickly becoming the preferred alternative for Chinese tech firms. Nvidia's market share in China has reportedly fallen from 90% to around 50% since 2022. But China remains a huge market for Nvidia, accounting for 13% of its sales in the past financial year. And this new chip is expected to help the company keep pace overseas despite its market share loss -- because as good as Huawei is becoming, Nvidia is still considered better.

Nvidia beats on earnings again -- even while it's locked out of China

After the bell on Wednesday, the $3.3 trillion chipmaker reported $44.1 billion in revenue for the fiscal first quarter, up 69% from the same period a year ago, and the company reported a $18.78 billion profit. Analysts had forecasted a revenue surge to $43.26 billion. Adjusted earnings per share came in at $0.81, ahead of Wall Street estimates of $0.75. Nvidia took a $4.5 billion charge related to exports of its H20 chips to China; without that charge and the related tax impact, first quarter non-GAAP diluted earnings per share would have been $0.96. With demand for generative AI infrastructure still booming and competitors struggling to catch up, Nvidia's performance exceeded expectations. In a Tuesday note, Wedbush analysts led by Dan Ives said that Nvidia's earnings would likely be a "bright green light" for the tech sector -- especially companies heavily invested in the "AI Revolution." The company's growth still hinges on its Data Center division, which brought in $39.1 billion in the first quarter, up 10% from the previous quarter and up 73% from a year ago. That means Nvidia's fastest-growing segment is now responsible for nearly 89% of all revenue -- a sign of how deeply embedded its chips are in the AI build-out. Analysts had expected this division to generate $21.27 billion in Q1 revenue. In his note, Ives wrote that, over the past several years, Nvidia's set-up has been about by how much the company would beat Wall Street's expectations, but this quarter, the earnings were "more about strong numbers and the ability to maintain guidance despite the China blockade. Investors are more laser focused on the medium term and long-term outlook." Nvidia has long relied on the Chinese market for a sizable chunk of its revenue, but that has changed dramatically in the wake of tightening U.S. export controls and tariffs. To maintain its foothold, Nvidia is pursuing R&D efforts in Shanghai and developing China-specific downgraded chips that comply with current restrictions. The company is ground zero in the U.S.-China tech rivalry -- its GPUs might just be the most valuable components in the AI arms race, and its position is increasingly shaped by policy, not just engineering. Nvidia has beat analysts' earnings expectations in 14 of the past 16 quarters. So can anything slow Nvidia down? Maybe. Competition is heating up. AMD (AMD+0.47%) and Intel (INTC-1.50%) are sharpening their AI chip offerings, while hyperscalers are continuing to invest in custom silicon. And export restrictions remain a geopolitical wild card. Still, as the first-quarter earnings show, Nvidia's moat is wide. Its software ecosystem, deep relationships with cloud providers, and product cadence make it more than just a chipmaker. It's the AI era's platform company.

Nvidia's China problem is big. Just not big enough to stop it

Most companies can't shrug off an $8 billion loss. Then again, most companies aren't Nvidia (NVDA). On Wednesday's first-quarter earnings call, Wall Street zeroed in on Nvidia's obvious weak spot: China. Thanks to U.S. export restrictions, Nvidia's custom-built H20 chips, designed to skirt earlier rules, have essentially been made worthless. Nvidia CFO Colette Kress confirmed the damage: "Had the export controls not occurred, we would have had orders of about $8 billion for H20" in the quarter. That $8 billion is more than rival AMD's (AMD) total quarterly revenue -- and Nvidia seems ready to just shrug off the loss The tech giant reported another monster quarter: Revenue soared 69% year-over-year to $44.1 billion, while net income grew even faster. The stock popped more than 4.5% on Thursday, and Nvidia, with a $3.4 trillion market cap, is the most valuable company in the world -- just ahead of Microsoft (MSFT) and now well ahead of Apple (AAPL). Nvidia's data center business alone grew 73% year-over-year and brought in over $39 billion. And with its next-generation Blackwell chips ramping up, inference workloads scaling globally, and governments racing to build AI capacity using Nvidia infrastructure, China has become -- if not an afterthought -- then certainly just one node in a much larger empire. Nvidia has bigger chips to fry. "This is the start of a powerful new wave of growth," CEO Jensen Huang said. Still, Nvidia isn't abandoning China. According to a recent report, the company is designing a modified Blackwell AI chip specifically for the Chinese market that will comply with U.S. export restrictions. Huang didn't confirm this directly -- he said Nvidia doesn't "have anything at the moment, but we're considering it." He did, however, address the broader implications. The question, he said, isn't whether China will have AI -- "it already does" -- but whether one of the world's largest AI markets will run on American platforms. Export controls, in his view, should "strengthen U.S. platforms, not drive half of the world's AI talent to rivals." Kress made the financial stakes clear: Nvidia expects a "meaningful decrease" in China data center revenue in the second quarter. Losing access to what it believes will be a $50 billion AI accelerator market would, she said, have "a material adverse impact" on the business and benefit rivals in China and beyond. As for the politics, Huang said that President Donald Trump "has a plan, and I respect it." But the bigger picture is that Nvidia isn't betting on any single market. It's betting on a global AI infrastructure boom that's only just getting started -- what Huang called "sovereign AI." The company's strategy isn't about selling to tech firms anymore. Entire countries could soon become Nvidia customers. "Nations are investing in AI infrastructure like they once did for electricity and internet," Huang said. "Sovereign AI is a new growth engine for Nvidia." "Every nation now sees AI as core to the next industrial revolution, a new industry that produces intelligence and essential infrastructure for every economy," he added. "Countries are racing to build national AI platforms to elevate their digital capabilities." Nvidia's recent moves show how seriously it's playing this global game. At Computex, Huang announced Taiwan's first AI factory, a collaboration with Foxconn (HNHPF) and the Taiwanese government. Shortly after, Huang was present as Sweden launched its inaugural national AI infrastructure. But perhaps most notable is Nvidia's opportunity in the Middle East. Huang was there for Trump's tour through the region, where the president announced a 500-megawatt AI infrastructure project in Saudi Arabia and a 5-gigawatt AI campus in the United Arab Emirates. Wedbush Securities analysts called it a "watershed moment" for Big Tech that could be a $1 trillion opportunity. Nvidia is positioned to capitalize on that global wave of AI infrastructure investment. As Huang said, this includes everything from powering cutting-edge training models to overhauling $500 billion of enterprise IT with its AI-ready systems. Add in industrial AI -- robotic factories, digital twins, and more -- and the company's footprint keeps expanding. "Just about every country needs to build out AI infrastructure," Huang said. "There are umpteenth AI factories being planned." Behind all of this is a bigger technological shift -- from generative AI to what comes next. "Reasoning AI really busted through," Huang said, referring to AI agents that can make decisions, use tools, remember, and plan. "Reasoning AI agents require orders of magnitude more compute." He added that the demand for AI reasoning is up, and "we would like to serve all of it, and I think we're on track to serve most of it." That shift -- from model training to full life-cycle AI infrastructure -- is fueling demand. Huang said Nvidia's Grace Blackwell NVLink72 is "the ideal engine today, the ideal computer thinking machine, if you will, for reasoning AI." And agentic AI, which takes reasoning a step further by acting autonomously, is making waves, too. "Enterprise AI is ready to take off," Huang said. "Much more than generative AI, agentic AI is game-changing." CFO Kress said the transition from generative to agentic AI will "transform every industry, every company, and country." She said Nvidia envisions AI agents as a "digital workforce capable of handling tasks ranging from customer service to complex decision-making processes." Huang said that Nvidia is in the "beginning of the build-out" -- and that "there should be many, many more announcements in the future." More AI means more chips. More chips need bigger clusters. Bigger clusters demand faster networking. And Nvidia is scaling every layer of that stack. Huang called Spectrum-X -- the company's AI-optimized Ethernet platform -- "a home run," noting that it added two major cloud providers in the past quarter. The platform can effectively turn $10 billion AI clusters into $14 billion ones through increased efficiency. And NVLink is also becoming foundational to the AI data center -- it exceeded $1 billion in the April quarter. Now analysts see networking as a meaningful second leg of Nvidia's AI infrastructure business. The U.S. export controls don't appear to be going anywhere, especially as tense -- and tech-heavy -- trade talks between the U.S. and China continue. But Nvidia seems prepared for what's ahead. The company just lost billions in China, and that might have been the least interesting thing about its quarter. As Nvidia continues to navigate a geopolitical minefield, it's not that China doesn't matter -- it's that everything else now matters more.

Nvidia earnings beat expectations despite US export controls

Nvidia on Wednesday reported earnings that topped market expectations, with a $4.5 billion hit from US export controls being less than the Silicon Valley chip juggernaut had feared. However, Nvidia Chief Financial Officer Colette Kress warned in an earnings call that export constraints are expected to cost the AI chip titan about $8 billion in the current quarter. Nvidia in April notified regulators that it expected a $5.5 billion hit in the recently-ended quarter due to a new US licensing requirement on the primary chip it can legally sell in China. US officials had told Nvidia it must obtain licenses to export its H20 chips to China because of concerns they may be used in supercomputers there, the company said in a Securities and Exchange Commission filing. The new licensing rule applies to Nvidia graphics processing units, or GPUs, with bandwidth similar to that of the H20. "China is one of the world's largest AI markets and a springboard to global success," Nvidia chief executive Jensen Huang said in an earnings call. "The platform that wins China is positioned to lead globally; however, the $50 billion China market is effectively closed to us." Nvidia cannot dial back the capabilities of its H20 chips any further to comply with US export constraints, winding up forced to write off billions of dollars on inventory that can't be sold or repurposed, according to Huang. "The US has based its policy on the assumption that China cannot make AI chips," Huang said. "That assumption was always questionable, and now it's clearly wrong." China's AI is moving on without Nvidia technology, while that country's chip-makers innovate products and ramp up operations, according to Huang. "The question is not whether China will have AI; it already does," he said. "The question is whether one of the world's largest markets will run on American platforms." The new requirements resulted in Nvidia incurring a charge of $4.5 billion in the quarter, associated with H20 excess inventory and purchase obligations "as demand for H20 diminished," the chip-maker said in an earnings report. US export constraints stopped Nvidia from bringing in an additional $2.5 billion worth of H20 revenue in the quarter, according to the company. Nvidia said it made a profit of $18.8 billion on revenue of $44.1 billion, causing shares to rise more than four percent in after-market trades. Hot demand Huang said demand for the company's AI-powering technology remains strong, and a new Blackwell NVL72 AI supercomputer referred to as a "thinking machine" is in full-scale production. "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the center of this profound transformation," Huang said. Nvidia high-end GPUs are in hot demand from tech giants building data centers to power artificial intelligence. The company said its data center division revenue in the quarter was $39.1 billion, up 10% from the same period last year. The market had expected more from the unit, however. "Nvidia beat expectations again but in a market where maintaining this dominance is becoming more challenging," said Emarketer analyst Jacob Bourne. "The China export restrictions underscore the immediate pressure from geopolitical headwinds but Nvidia also faces mounting competitive pressure as rivals like AMD gain ground," said Emarketer analyst Jacob Bourne. Revenue in Nvidia's gaming chip business hit a record high of $3.8 billion, leaping 48% and eclipsing forecasts. The AI boom has propelled Nvidia's stock price, which has regained much of the ground lost in a steep sell-off in January triggered by the sudden success of DeepSeek. China's DeepSeek unveiled its R1 chatbot, which it claims can match the capacity of top US AI products for a fraction of their costs. "The broader concern is that trade tensions and potential tariff impacts on data center expansion could create headwinds for AI chip demand in upcoming quarters," analyst Bourne said of Nvidia.

Nvidia earnings beat expectations despite US export controls

San Francisco (AFP) - Nvidia on Wednesday reported earnings that topped market expectations, with a $4.5 billion hit from US export controls being less than the Silicon Valley chip juggernaut had feared. However, Nvidia Chief Financial Officer Colette Kress warned in an earnings call that export constraints are expected to cost the AI chip titan about $8 billion in the current quarter. Nvidia in April notified regulators that it expected a $5.5 billion hit in the recently-ended quarter due to a new US licensing requirement on the primary chip it can legally sell in China. US officials had told Nvidia it must obtain licenses to export its H20 chips to China because of concerns they may be used in supercomputers there, the company said in a Securities and Exchange Commission filing. The new licensing rule applies to Nvidia graphics processing units, or GPUs, with bandwidth similar to that of the H20. "China is one of the world's largest AI markets and a springboard to global success," Nvidia chief executive Jensen Huang said in an earnings call. "The platform that wins China is positioned to lead globally; however, the $50 billion China market is effectively closed to us." Nvidia cannot dial back the capabilities of its H20 chips any further to comply with US export constraints, winding up forced to write off billions of dollars on inventory that can't be sold or repurposed, according to Huang. "The US has based its policy on the assumption that China cannot make AI chips," Huang said. "That assumption was always questionable, and now it's clearly wrong." China's AI is moving on without Nvidia technology, while that country's chip-makers innovate products and ramp up operations, according to Huang. "The question is not whether China will have AI; it already does," he said. "The question is whether one of the world's largest markets will run on American platforms." The new requirements resulted in Nvidia incurring a charge of $4.5 billion in the quarter, associated with H20 excess inventory and purchase obligations "as demand for H20 diminished," the chip-maker said in an earnings report. US export constraints stopped Nvidia from bringing in an additional $2.5 billion worth of H20 revenue in the quarter, according to the company. Nvidia said it made a profit of $18.8 billion on revenue of $44.1 billion, causing shares to rise more than four percent in after-market trades. Hot demand Huang said demand for the company's AI-powering technology remains strong, and a new Blackwell NVL72 AI supercomputer referred to as a "thinking machine" is in full-scale production. "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the center of this profound transformation," Huang said. Nvidia high-end GPUs are in hot demand from tech giants building data centers to power artificial intelligence. The company said its data center division revenue in the quarter was $39.1 billion, up 10 percent from the same period last year. The market had expected more from the unit, however. "Nvidia beat expectations again but in a market where maintaining this dominance is becoming more challenging," said Emarketer analyst Jacob Bourne. "The China export restrictions underscore the immediate pressure from geopolitical headwinds but Nvidia also faces mounting competitive pressure as rivals like AMD gain ground," said Emarketer analyst Jacob Bourne. Revenue in Nvidia's gaming chip business hit a record high of $3.8 billion, leaping 48 percent and eclipsing forecasts. The AI boom has propelled Nvidia's stock price, which has regained much of the ground lost in a steep sell-off in January triggered by the sudden success of DeepSeek. China's DeepSeek unveiled its R1 chatbot, which it claims can match the capacity of top US AI products for a fraction of their costs. "The broader concern is that trade tensions and potential tariff impacts on data center expansion could create headwinds for AI chip demand in upcoming quarters," analyst Bourne said of Nvidia.

Nvidia shares surge as earnings beat despite chip export restrictions

Nvidia reported first-quarter earnings for fiscal year 2026 that exceeded market expectations and provided an upbeat outlook for the current quarter. This comes despite an estimated $8 billion (€7.1 billion) loss due to US chip export restrictions affecting sales to China. Nvidia's share price jumped nearly 5% in after-hours trading, placing it just 8% below its all-time high in January. Year-to-date, the stock is set to return to a positive return amid the price surge. Nvidia is now the world's biggest company, surpassing Microsoft and Apple in market capitalisation. "Investors entered this quarter looking for signs that Nvidia could alleviate short-term concerns. What they received was a clear message that demand remains robust," said Josh Gilbert, a market analyst at eToro Australia. Sales revenue from Nvidia's core business, data centres, increased by 73% year-on-year to $39.1 billion (€34.7 billion), reaching a new record. However, this represented a deceleration from 93% growth in the previous quarter. Despite the slower pace, the result aligned with market expectations, as some analysts had anticipated weaker figures due to regulatory headwinds. Overall revenue rose 69% to $44.1 billion (€39.2 billion), while earnings per share came in at $0.96 (€0.85), both ahead of expectations. CEO Jensen Huang attributed the sustained growth to strong global demand for artificial intelligence (AI), particularly from major cloud service providers. Nvidia's most advanced AI chip, Blackwell, "is now in full-scale production across system makers and cloud service providers," said Huang. "Global demand for Nvidia's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognising AI as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the centre of this profound transformation," he added. The company expects revenue of $45 billion (€40 billion), plus or minus 2%, for the current quarter. "This outlook reflects a loss in H20 revenue of approximately $8.0 billion due to the recent export control limitations," it stated. The US government required Nvidia to obtain export licences for its H20 GPUs destined for China during the first quarter. Although the H20 chips had previously been approved, the new rules led to $4.5 billion (€4 billion) in write-downs due to excess inventory. Without this, the company would have generated an additional $2.5 billion (€2.2 billion) in sales. As a result, Nvidia's gross margin for the first quarter stood at 61%. It would have been 71.3% had the charges not occurred. "The $50 billion China market is effectively closed to the US industry," Huang said. "As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed." Nvidia expects a non-GAAP gross margin of 72.0%, plus or minus 50 basis points, for the current quarter. For context, the margin was 73.5% in the fourth quarter of 2024 and 79% during the same quarter of the previous fiscal year. In an interview with Bloomberg TV, Huang noted that Nvidia is exploring alternatives to the H20 chip. However, the company must obtain approval from the US government for any such measures. Nvidia is among the tech giants supporting President Donald Trump's ambitious AI initiatives in the United States, announced in January. The company also unveiled a partnership with Saudi Arabia's HUMAIN to build AI factories in the kingdom during a recent visit to the region that coincided with Trump's trip. These developments were highlighted in the earnings report in the section for data centre. "While sales in China are clouded by export restrictions, the Middle East looks set to become the new launchpad for Nvidia's next phase of growth," Gilbert added.

Nvidia results spark global chip rally

Jensen Huang, co-founder and CEO of Nvidia Corp., speaks during a news conference in Taipei on May 21.I-Hwa Cheng / AFP - Getty Images Nvidia shares jumped on Thursday after posting a positive set of earnings, sparking a rally in global semiconductor stocks. Shares of Nvidia were 6% higher after the company posted better-than-expected earnings and revenue on Wednesday, even as it took a hit from U.S. semiconductor export restrictions to China. Nvidia has been seen by investors as a bellwether for the broader semiconductor industry and artificial intelligence-related stocks, with its latest strong numbers sparking a rally among global semiconductor names. The semiconductor industry has faced a number of headwinds from uncertainty around tariff policy in the U.S. and chip export restrictions to China. Companies such as ASML, which makes machines that are critical for manufacturing the most advanced chips, have seen billions wiped off their value as a result. Nvidia on Wednesday said it wrote off $4.5 billion of H20 chip inventory that it couldn't ship to China because of export curbs, saying it also calculated $2.5 billion of lost revenue as well. The restrictions on China do not seem to be going away. The U.S. has ordered a number of companies, including those producing chemicals and design software for semiconductors, to stop shipping goods to China without a license, according to a Reuters report on Thursday. Despite this, Nvidia still managed to post financial results for the April quarter that beat market expectations, allaying fears that demand for its graphics processing units, which have become key for training huge AI models, is dwindling.

Nvidia's Hopper GPUs are now dead to the Chinese market after export controls that made the company take a 'multibillion-dollar write-off'

(Image credit: Walid Berrazeg/SOPA Images/LightRocket via Getty Images) There was more than the usual swell of anticipation for Nvidia's latest earnings call, primarily because the last quarter has been tumultuous in the wake of US tariffs and trade restrictions. On this front, and despite the fact that the AI chip giant still seems to be doing phenomenally well, Nvidia has admitted export controls have fully killed off its Hopper generation GPUs in China. During the company's recent Q1 earnings call, Nvidia CEO Jensen Huang explained: "The H20 export ban ended our Hopper Data Center business in China. We cannot reduce Hopper further to comply. As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed. We are exploring limited ways to compete, but Hopper is no longer an option." Hopper is the company's previous-gen GPU/AI accelerator architecture. While its Blackwell architecture -- the architecture at the heart of the RTX 50 series -- is rolling out to fill up data centres despite previous delays, Hopper chips still line many server racks and they were the primary Nvidia export to China. The past couple of years have seen the same scene play out over and over again: The US restricts what Nvidia can export to China, Nvidia starts exporting a slightly less powerful Hopper chip to China, then the US restricts it further so that less powerful Hopper chip is restricted, too. Rinse and repeat. No longer, though, according to Nvidia. Now, there is seemingly no less powerful chip that Nvidia can comfortably make and export to the country. Nvidia Hopper is dead in China. Nvidia CFO Colette Kress says: "our outlook reflects a loss in H20 revenue of approximately $8 billion for the second quarter." H20 is the Hopper chip that Nvidia was previously exporting to China, and $8 billion revenue loss for Q2 is a lot more than the company lost for Q1. Nvidia had previously said that it could lose $5.5 billion in Q1 because of export restrictions, but it looks like that amount turned out to be $2.5 billion in the end: "We recognized $4.6 billion H20 in Q1. We were unable to ship $2.5 billion, so the total for Q1 should have been $7 billion." Despite praising President Trump's "bold vision", the company doesn't seem to agree with his trade restriction strategy in this case. Huang says: "The question is not whether China will have AI, it already does. The question is whether one of the world's largest AI markets will run on American platforms. Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position." We've heard Huang say similar before, and it's certainly an argument to take seriously. At the same time, though, we can hardly expect the CEO of a chip company to support the banning of its exports to one of its biggest markets. The China export restrictions were certainly the main talking point in the earnings call, other than the usual "AI factory" stuff and a sliver of gaming talk. On that front, Nvidia claims a "record $3.8 billion" gaming revenue, but the wow-factor shrivels a little when we remember that Nvidia's pushed out a bunch of its new GPUs over a very short period, so we can expect an inflated number there. Nvidia all but admits this when it calls Blackwell its "fastest ramp ever" -- that's "fastest", not "biggest". Anyway, trade talk aside, Nvidia seems to be doing pretty well in the wake of this news. I'm sure the multi-billion company will survive Hopper waving farewell to China.

Nvidia delivers another earnings and revenue beat on rampant data center growth - SiliconANGLE

Nvidia delivers another earnings and revenue beat on rampant data center growth Nvidia Corp.'s shares were moving higher in extended trading after the company reported better-than-expected earnings and revenue, with its data center business growing 73% year-over-year. The growth was impressive enough that investors were even willing to forgive Nvidia's guidance miss, and its stock was up 4% after-hours. The company reported first-quarter earnings before certain costs such as stock compensation of 96 cents per share, beating the analyst forecast of 93 cents. Revenue for the period came to $44.06 billion, up 69% from a year ago, and ahead of the $43.31 billion expected. That helped propel Nvidia's net income to $18.8 billion for the quarter, up from $14.9 billion in the year-ago period. With respect to guidance, Nvidia came up short, but the forecast was not entirely unexpected. The company said it's looking at around $45 billion in current-quarter sales, trailing Wall Street's target of $45.9 billion. But even so, investors probably suspected the company might come up short, for Nvidia explained that its guidance would have been around $8 billion higher if not for the U.S. government's latest export restrictions on advanced chips being sold to China. In April, the U.S. government told the company it would need to obtain a special export license to sell any more of its H20 graphics processing units to Chinese customers, effective immediately. The H20 chip is a specialized, scaled-down version of the company's older H100 and H200 GPUs, based on the Hopper architecture that dates back to 2023. The new restrictions, which were heavily criticized by Nvidia Chief Executive Jensen Huang (pictured), forced the company to write off around $4.5 billion in stock. This month, Nvidia said it had to walk away from around $15 billion in planned sales due to the restrictions. According to Nvidia Chief Financial Officer Collette Kress, the company's gross margin would have been 71.3% in the previous quarter, rather than 61%, if not for the China-related charges. On a conference call today, Huang told analysts that the $50 billion market for artificial intelligence chips in China is "effectively closed to U.S. industry." He added that the H20 export ban has "ended our Hopper data center business in China." While the company is unlikely to sell any more Hopper-based chips to Chinese customers, there have been unconfirmed reports that it hasn't entirely given up on the market. Earlier this week, a report by Reuters quoted anonymous sources familiar with the company's plans as saying that it's now racing to develop yet another, even more scaled-down GPU for China, based on its newer Grace Blackwell architecture. But it's not clear if Nvidia will be able to develop a new chip that satisfies the U.S.'s strict regulations on shipments to China, and there's no word on when such a chip might be ready for export. Despite these problems, Nvidia is still growing aggressively, benefiting from enormous demand from hyperscale data center operators and enterprises that continue to snap up as many of its GPUs as possible, in a frenzy to power advanced generative AI and agentic AI applications. "Global demand for Nvidia's AI infrastructure is incredibly strong," Huang told analysts. "AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate." Sales in Nvidia's biggest business unit, the data center division, rose 73% from a year earlier to $39.1 billion, and now account for 88% of the company's total revenue. Officials said that large cloud hyperscalers such as Microsoft Corp., Amazon Web Services Inc. and Meta Platforms Inc. accounted for just under half of the total data center revenue. Also, $5 billion of sales in the unit were related to Nvidia's InfiniBand networking products, which are used to connect thousands of GPUs into enormous clusters to power the most demanding AI workloads. Kress told analysts that the company was enjoying brisk sales of its latest Grace Blackwell GPUs. She said that Microsoft has already "deployed tens of thousands of Blackwell GPUs, and is expected to ramp to hundreds of thousands" in the coming months, largely due to its close relationship with AI leader OpenAI. AI isn't the only growth avenue for the company, either. Nvidia reported that its gaming division, which was once its largest business but is now dwarfed by the data center unit, saw revenue increase 42% during the quarter. All told, it delivered $3.8 billion in sales of chips used for PC graphics cards and games consoles such as the new Nintendo Switch 2. Nvidia also has a small but growing business selling chips for automotive and robotics applications, and that unit saw sales rise 72% to $567 million in the quarter. The company attributed growth there to increased demand for chips for self-driving cars. Meanwhile the professional virtualization business, which sells chips for high-powered workstations used for 3D design applications, saw revenue increase 19% to $509 million. Thanks to the after-hours bump, Nvidia's stock is now almost flat in the year-to-date, and less than 5% below its record high of 148.59 reached on Jan. 6.

The $50 Billion Market That's Haunting NVIDIA | AIM

"China's AI moves on with or without U.S. chips. It has to compute to train and deploy advanced models." NVIDIA chief executive Jensen Huang is fretting. This is evident in the loss of opportunity to do business in China, one of the world's leading AI markets with a $50 billion opportunity. In recent months, Huawei Technologies, NVIDIA's Chinese counterpart, has gained in NVIDIA's absence and is building an advanced chip production facility to deliver multiple parts for the AI supply chain. Even as the US chip maker maintains a 90% share in the global GPU market, the potential loss of opportunity, approximately worth $8 billion USD for the upcoming quarter, a sixth of its Q1 revenue, has riled them up. US President Donald Trump maintained the export restrictions on Chips, amid repeated warnings from industry leaders that it could threaten the country's AI dominance. Huang called it a major strategic blow to the US and said the restrictions have spurred China's innovation and scale. "Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position," Huang said during the company's earnings call on Wednesday, calling the East Asian country a springboard to global success. "With half of the world's AI researchers based there, the platform that wins China is positioned to lead globally," he said. "China's AI moves on with or without U.S. chips. It has to compute to train and deploy advanced models." Huang said the country's assumption that China cannot make AI chips was flawed, and considering China's enormous manufacturing capabilities, it has proved them wrong now. On April 9, 2025, the US government informed NVIDIA that a license is required to export its H20 products to the Chinese market. As a result of these new requirements, NVIDIA incurred a $4.5 billion charge in the first quarter of fiscal 2026. The company reported $4.6 billion in H20 product sales in the quarter prior to the licensing requirement. NVIDIA CFO Colette Kress said during the earnings call that the company is still evaluating its limited options to supply data centre compute products to China, compliant with the US government's revised export control rules. She added that in the data centre, the company anticipates the continued ramp of Blackwell to be partially offset by a decline in China revenue. "Our outlook reflects a loss in H20 revenue of approximately $8 billion for the second quarter," Kress said. According to Taiwanese outlet Digitimes, which cited sources within the supply chain, NVIDIA and AMD are preparing to launch new AI GPUs for the Chinese market to comply with US export restrictions on advanced semiconductor technology. NVIDIA is reportedly set to introduce a scaled-down AI GPU known internally as the "B20", while AMD plans to offer its new Radeon AI PRO R9700 workstation GPU to meet local AI computing needs. Both companies are expected to begin shipments in China by July. Separately, Reuters recently reported that NVIDIA is developing a lower-cost AI chip based on its Blackwell architecture for the Chinese market. The chip's projected price range is $6,500 to $8,000, which would place it below the price of its H20 GPU, which currently sells for between $10,000 and $12,000. Notably, according to a Reuters report, Huawei is set to begin mass shipments of its Ascend 910C AI chip to Chinese customers in May. The Ascend 910C is an upgraded GPU that combines two 910B processors into a single package, effectively doubling computing power and memory capacity. Meanwhile, Huawei is preparing to test its new AI chip, the Ascend 910D, in China, while it has also introduced the Ascend 920 AI chip. According to DigiTimes Asia, the chip is slated to enter mass production in the second half of 2025. Industry experts believe the Ascend 920 could be a viable alternative to NVIDIA's H20 GPUs. Meanwhile, Cambricon Technologies is also gaining prominence in China. In a recent report, Cambricon said it had successfully optimised Qwen3 to run efficiently on its GPUs. This optimisation was driven by demand from AI developers in the Philippines seeking China-made chips. Meanwhile, Trump also warned against using Chinese AI chips, leading to criminal penalties. Despite the setback in China, NVIDIA reported $44.1 billion in revenue in Q1FY26, up 12% from the previous quarter and 69% from last year. This comes as NVIDIA announces plans to build AI factories in the US and partner with local manufacturers to produce NVIDIA supercomputers domestically. The company introduced Blackwell Ultra and Dynamo to accelerate large-scale AI reasoning. Kress also clarified that while Singapore accounted for nearly 20% of Q1 billed revenue, over 99% of the H100, H200, and Blackwell compute revenue billed to Singapore came from US-based customers. Meanwhile, authorities in Singapore and the US are also investigating allegations that $390 million worth of NVIDIA chip servers sent to Malaysia were fraudulently redirected to China. NVIDIA is also partnering with HUMAIN to establish AI factories in Saudi Arabia and unveiled Stargate UAE, a next-gen AI cluster in Abu Dhabi, with partners including G42, OpenAI, Oracle, SoftBank, and Cisco. Moreover, the company is collaborating with Foxconn and the Taiwan government on an AI factory supercomputer. Huang framed the issue beyond individual chip models or product lines. "The AI race is not just about chips. It's about which stack the world runs on. As that stack grows to include 6G and quantum, U.S. global infrastructure leadership is at stake." He emphasised that "export controls should strengthen US platforms, not drive half of the world's AI talent to rivals." Pointing to China's DeepSeek and Qwen models, Huang said, "DeepSeek-R1, like ChatGPT, introduced reasoning AI that produces better answers the longer it thinks. Reasoning AI enables step-by-step problem solving, planning and tool use, turning models into intelligent agents." All said and done, Huang maintained that US platforms must remain the preferred platform for open-source AI even if it means collaborating with top developers globally, including in China." The question remains whether China will have its own AI capabilities and chip dominance or run on the American tech stack.

Nvidia's first quarter earnings boom despite chip curbs

Nvidia founder and CEO Jensen Huang. Image: Simon Liu/Flickr (CC BY 2.0) The company expects to lose out on $8bn in revenue from US restrictions to chip exports. Chipmaking giant Nvidia reported a strong first quarter, with revenue up 69pc year-on-year as the global demand for its AI chips surge. Nvidia made just more than $44bn this quarter, a 12pc rise from the previous quarter last year. The company also forecasts a positive outlook for the coming quarter, expecting revenue to reach around $45bn. This, in spite of the recent export control on its chips, it said. Earlier last month, Nvidia was informed by the US government that it requires an export license to sell its previously approved H20 processors to China. This cost the company $4.5bn, it said. Nvidia said that, if left unrestricted, the sales would have resulted in $2.5bn additional revenue. While for the upcoming quarter, the company expects to lose out on an additional $8bn in revenue from the processors. CEO Jensen Huang also told investors that the Chinese market for AI chips, worth $50bn, is "effectively closed to the US industry". Despite this, the global demand for Nvidia's AI infrastructure seems to be growing. "Global demand for NVIDIA's AI infrastructure is incredibly strong," Huang said, adding that the company is key to the worldwide demand for AI. The company's first quarter data centre revenue was $39bn, up 73pc from a year ago. This follows major announcements that the company made. Just earlier this month, the company announced a partnership with the Taiwanese government for an AI factory in the country, as well as a new deal with the Saudi Arabia for thousands of its AI chips. Nvidia's gaming arm, which revolutionised the industry with its GPUs, recorded $3.8bn in revenue this past quarter - up 42pc from Q1 last year. The company is launching the Nintendo Switch 2, the next edition to its popular gaming console, early next month. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news. Nvidia founder and CEO Jensen Huang. Image: Simon Liu/Flickr (CC BY 2.0)

Nvidia's chief says U.S. chip controls on China have backfired

TAIPEI, Taiwan -- Lawmakers in Washington have worked for years to limit China's access to the cutting-edge computer chips needed for advanced artificial intelligence, particularly those made by Nvidia, America's leading chipmaker. But according to Nvidia's chief executive, Jensen Huang, those regulations, driven by economic and security concerns, have only made Chinese tech companies stronger. The export controls on chips forced Nvidia to forfeit its dominant position in China while domestic companies like Huawei, the telecommunications giant, filled the gap, Huang said at a news conference in Taipei, Taiwan's capital, on Wednesday. Washington's efforts gave Chinese companies "the spirit, the energy and the government support to accelerate their development," said Huang, who attended a tech conference in Taipei last week. "All in all, the export control was a failure." Beginning in 2022, under President Joe Biden, the U.S. government imposed rules to curb the export of Nvidia's most powerful chips to China. Nvidia responded by modifying one type of chip, making it less powerful so it would fall below the government's performance thresholds. Last month, Nvidia disclosed that U.S. officials were requiring a license for future sales of those chips to China, forcing the company to take a $5.5 billion hit on inventory it had already planned to sell. Although Huawei's chips cannot do everything that Nvidia's can, they work well enough to help Chinese companies provide AI services to people and businesses. In recent months, the government in Beijing has been pushing companies to stock their data centers with mostly Chinese-made chips. "AI researchers are still doing AI research in China," Huang said Wednesday. "If they don't have enough Nvidia, they will use their own." Huang has vowed that Nvidia will do everything it can to keep selling AI chips in China. The day after the U.S. government opened an investigation into whether Nvidia's previous sales to China had violated its rules, Huang met with top economic and trade officials in Beijing. Nvidia says it is concerned that any advantage gained by Huawei in China could eventually spread into other markets, helping Huawei build a stronger foundation from which to compete around the world. Washington's controls on chip exports have made it increasingly difficult for Nvidia to do business in China. The country accounted for $17 billion of Nvidia's revenue during its last fiscal year, by percentage the least in over a decade, according to Bernstein Research. Nvidia reported $130 billion in global revenue during its last fiscal year, an increase of 114% over the year before. "Four years ago, at the beginning of the Biden administration, Nvidia's market share in China was nearly 95%," Huang said. "Today it is only 50%." This month, the U.S. Commerce Department said any person or company using Huawei AI chips could be in violation of U.S. export controls. Countries around the world have been lining up to buy Nvidia chips, and the Trump administration has positioned itself as a deal broker. Huang was in the Persian Gulf region last week during President Donald Trump's visit there, as the administration struck multibillion-dollar agreements to sell advanced chips from Nvidia to Saudi Arabia and the United Arab Emirates. Officials in the administration believe these deals will boost business for American AI companies like Nvidia and widen the nation's lead in artificial intelligence. Huang criticized the approach taken by the Biden administration. "President Trump said very publicly he would like Nvidia to sell as many GPUs as possible all around the world," Huang said, referring to an Nvidia product needed for AI systems. He said it was important that China's artificial intelligence developers work on systems made by Nvidia "or at least on American technology."

Nvidia overcomes tariff-driven turbulence to deliver results that eclipsed analyst projections

SAN FRANCISCO -- Artificial intelligence technology bellwether Nvidia overcame a wave of tariff-driven turbulence to deliver another quarter of robust growth amid feverish demand for its high-powered chips that are making computers seem more human. The results announced Wednesday for the February-April period came against a backdrop of President Donald Trump's on-again, off-again trade war that has whipsawed Nvidia and other Big Tech companies that have been riding AI mania to propel both their revenue and stock prices increasingly higher. But Trump's fusillade of tariffs -- many of which have been reduced or temporarily suspended - hammered the market values of Nvidia and other tech powerhouses heading into the springtime earnings season as investors fretted about the trade turmoil dimming the industry's prospects. Those worries have eased during the past six weeks as most Big Tech companies lived up to or exceeded the analyst projections that steer investors, capped by Nvidia's report for its fiscal first quarter. Nvidia earned $18.8 billion, or 76 cents per share, for the period, a 26% increase from the same time last year. Revenue surged 69% from a year ago to $44.1 billion. If not for a $4.5 billion charge that Nvidia absorbed to account for the U.S. government's restrictions on its chip sales to China, Nvidia would have made 96 cents per share -- far above the 73 cents per share, excluding certain items envisioned by analysts. The performance helped Nvidia's shares by gaining nearly 4% in extended trading after the numbers came out. Nvidia's stock price ended Wednesday's regular trading session at $134.81, just slightly below where it stood before Trump's Jan. 20 inauguration. The price had plunged to as low as $86.62 last month during a nosedive that temporarily erased $1.2 trillion in shareholder wealth.

Nvidia posts mixed Q1, predicts $8B hit with US chip curbs

Nvidia shares have jumped nearly 5% after-hours after the chipmaker's Q1 results beat estimates on revenue but fell short on earnings. Chip-making giant Nvidia has posted mixed results in its first quarter earnings, beating Wall Street expectations on revenue but missing predictions on its income amid US restrictions on its exports to China. In earnings released May 28 for its first quarter of the 2026 fiscal year ended April 27, Nvidia reported revenues of $44.1 billion, up 12% from its previous quarter and 69% from a year ago and beating Zacks analyst estimates of $42.91 billion by nearly 2.7%. However, the chip maker posted an earnings per share of 81 cents, missing analyst estimates of 85 cents per share. Nvidia recorded a net income of $18.8 billion, up 26% compared to a year ago. In an earnings call, Nvidia founder and CEO Jensen Huang said that the "global demand for Nvidia's AI infrastructure is incredibly strong" as countries start recognizing "AI as essential infrastructure -- just like electricity and the internet." "AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate," he said. Nvidia said the lower-than-expected income resulted from a $4.5 billion charge due to the US government's restrictions on exporting its high-powered H20 artificial intelligence chips to China. In its outlook for its Q2 results, the company said it expects revenues around $45 billion, which "reflects a loss in H20 revenue of approximately $8.0 billion due to the recent export control limitations." Nvidia will reportedly launch a new lower-cost AI chip specifically for China, with mass production expected to start in June. Nvidia's data center revenue accounted for most of the firm's total revenues, hitting $39.1 billion, up 10% from the previous quarter. Related: El Salvador works with Nvidia to develop sovereign AI infrastructure Shares in Nvidia Corp (NVDA) closed trading on May 28 down 0.51% at $134.81 but rallied 4.89% after the bell on its results to $141.40, according to Google Finance.

Nvidia overcomes tariff-driven turbulence to deliver Q1 results that eclipsed projections

SAN FRANCISCO (AP) -- Artificial intelligence technology bellwether Nvidia overcame a wave of tariff-driven turbulence to deliver another quarter of robust growth amid feverish demand for its high-powered chips that are making computers seem more human. The results announced Wednesday for the February-April period came against the backdrop of President Donald Trump's on-again, off-again trade war that has whipsawed Nvidia and other Big Tech companies riding AI mania to propel their revenue and stock prices upward. But Trump's tariffs -- many of which have been reduced or temporarily suspended - hammered the market values of Nvidia and other tech powerhouses heading into the springtime earnings season as investors fretted about the trade turmoil dimming the industry's prospects. Those worries have eased during the past six weeks as most Big Tech companies lived up to or exceeded the analyst projections that steer investors, capped by Nvidia's report for its fiscal first quarter. Nvidia earned $18.8 billion, or 76 cents per share, for the period, a 26% increase from the same time last year. Revenue surged 69% from a year ago to $44.1 billion. If not for a $4.5 billion charge that Nvidia absorbed to account for the U.S. government's restrictions on its chip sales to China, Nvidia would have made 96 cents per share, far above the 73 cents per share envisioned by analysts. In another positive sign, Nvidia predicted its revenue for the May-July period would be about $45 billion, roughly the level that investors had been anticipating. The forecast includes an estimated $8 billion loss in sales to China due to the export controls during its fiscal second quarter, after the restrictions cost it about $2.5 billion in revenue during the first quarter. "Global demand for NVIDIA's AI infrastructure is incredibly strong," Nvidia CEO Jensen Huang said. The performance bolstered Nvidia's shares, which gained more than 4% in extended trading after the numbers came out. Nvidia's stock price ended Wednesday's regular trading session at $134.81, just slightly below where it stood before Trump's Jan. 20 inauguration. The price had plunged to as low as $86.62 last month during a nosedive that temporarily erased $1.2 trillion in shareholder wealth. The outlook began brightening for Nvidia last month after AI leaders such as Microsoft, Alphabet and Meta Platforms reaffirmed their plans to invest heavily in AI. That spending has been a boon for Nvidia because its chipsets provide the technology's brainpower, an advantage that has helped the company's annual revenue from $27 billion to $130 billion in just two years. Wedbush Securities analyst estimates Big Tech companies will spend about $325 billion on long-term investments primarily revolving around AI this year, with a substantial chunk of that money budgeted for Nvidia's chips. Trump's trade war has been raising doubts about Nvidia's ability to maintain its astounding momentum by threatening to close off key market, especially China. In apparent attempt to curry favor with the president, Huang last month announced Nvidia will help boost U.S. manufacturing by building some of its AI chips and supercomputers in plants located in Arizona and Texas. Huang also accompanied Trump on a trip to Saudi Arabia earlier this month, signaling Nvidia's ambitions to sell more of its AI chips in the Middle East as that region attempts to lessen its economy dependence on oil. Trump also extended a helping hand to Nvidia of by rescinding the scheduled start export controls that had been drawn up under President Joe Biden's administration that would have broadened the restrictions on chips sales in foreign markets beyond the limits already in place on deals with China and Russia.

NVIDIA to lose billions in H20 GPU sales, Jensen warns of an AI backfire

As an Amazon Associate, we earn from qualifying purchases. TweakTown may also earn commissions from other affiliate partners at no extra cost to you. President Trump's new export guidelines went into effect in April, and NVIDIA, the GPU powerhouse that is powering the massive push into AI through providing the necessary hardware to fuel data centers, is expected to feel the hit from the new trade restrictions. According to reports, NVIDIA is set to be effectively cut off from the Chinese datacenter market, but it will still manage to realize approximately $4.6 billion of the ordered $7.1 billion worth of H20 GPUs in Q1. Moreover, NVIDIA lost $2.5 billion in H20 sales in Q1 and will have to reduce expected revenue by another $8 billion in Q2. The bleeding doesn't stop there, as NVIDIA will be unable to fulfill purchase commitments in Q1 for H20 iunventory that equates to $4.5 billion. Despite the loss in revenue, NVIDIA CEO Jensen Huang praised the Trump administration's decision to unwhind the Biden Administration's AI Diffusion plan, as it would have cost NVIDIA even more money, as previous administrations plan was to implement a cap on AI chips to the rest of world, essentially setting a fixed number for NVIDIA's sales. Despite the trade restrictions, NVIDIA isn't going to give up on the market entirely, with Huang saying the company is currently exploring ways to still compete. "China's AI moves on with or without US chips. It has the compute to train and deploy advanced models. The question is not whether China will have AI; It already does. The question is whether one of the world's largest AI markets will run on American platforms," Huang said. "Shielding Chinese chip makers from US competition only strengthens them abroad and weakens America's position."

Nvidia Overcomes Tariff-Driven Turbulence to Deliver Results That Eclipsed Analyst Projections

SAN FRANCISCO (AP) -- Artificial intelligence technology bellwether Nvidia overcame a wave of tariff-driven turbulence to deliver another quarter of robust growth amid feverish demand for its high-powered chips that are making computers seem more human. The results announced Wednesday for the February-April period came against a backdrop of President Donald Trump's on-again, off-again trade war that has whipsawed Nvidia and other Big Tech companies that have been riding AI mania to propel both their revenue and stock prices increasingly higher. But Trump's fusillade of tariffs -- many of which have been reduced or temporarily suspended - hammered the market values of Nvidia and other tech powerhouses heading into the springtime earnings season as investors fretted about the trade turmoil dimming the industry's prospects. Those worries have eased during the past six weeks as most Big Tech companies lived up to or exceeded the analyst projections that steer investors, capped by Nvidia's report for its fiscal first quarter. Nvidia earned $18.8 billion, or 76 cents per share, for the period, a 26% increase from the same time last year. Revenue surged 69% from a year ago to $44.1 billion. If not for a $4.5 billion charge that Nvidia absorbed to account for the U.S. government's restrictions on its chip sales to China, Nvidia would have made 96 cents per share -- far above the 73 cents per share, excluding certain items envisioned by analysts. The performance helped Nvidia's shares by gaining nearly 4% in extended trading after the numbers came out. Nvidia's stock price ended Wednesday's regular trading session at $134.81, just slightly below where it stood before Trump's Jan. 20 inauguration. The price had plunged to as low as $86.62 last month during a nosedive that temporarily erased $1.2 trillion in shareholder wealth. Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Nvidia beats expectations with strong quarterly earnings despite export controls

Nvidia posted strong quarterly earnings Wednesday, beating Wall Street's expectations despite new export controls imposed by the Trump administration limiting the sale of some of its advanced chips to China. The powerhouse chipmaker, which is central to the artificial intelligence (AI) boom, saw its quarterly revenue grow 69 percent year-over-year, increasing from $26 billion in the first quarter of 2024 to $44 billion in the first quarter of this year. The company's data center business saw its revenue rise 73 percent over the same period, growing from $22.6 billion to $39.1 billion, although it fell just short of the market forecast for the segment. "Global demand for NVIDIA's AI infrastructure is incredibly strong," Nvidia CEO Jensen Huang said in a statement. "AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate." "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation," he added. Nvidia noted in a press release that it faced a $4.5 billion charge in the first quarter due to new restrictions, which blocked the chipmaker from exporting its H20 graphics processing units to China. Its earnings per share came in below expectations at $0.81, which the company attributed to the impact of the export conrols. Without the additional charge and related tax impacts, Nvidia said its earnings per share would have surpassed forecasts at $0.96. The chipmaker said it expects another $8 billion loss in the second quarter from the chip restrictions.

Nvidia stock rises after earnings announcement despite Chinese AI market cutoff

The company recorded the revenue increase despite a $4.5 billion charge associated with excess inventory and purchase obligations after export restrictions were placed on the H20 chip designed for the Chinese market by the Trump administration. Nvidia CEO Jensen Huang said on the company's investor call that "the H20 export ban ended our Hopper data center business in China" and that the $50 billion AI chip market in China is "effectively closed to U.S. industry." The company had expected to incur a $5.5 billion dollar charge - according to Reuters - but Nvidia said in CFO commentary that it was able to mitigate some of the impact by reusing materials. The chip giant reported that it lost $2.5 billion of H20 revenue in the quarter. Nvidia stock rose in after-hours trading Wednesday, bouncing between a 4% and 5% gain after the bell. Nvidia earnings hit by export charge The company said that its gross margin was 61% for the quarter but would have been 71.3% if not for the export restrictions. The same dynamic was reported for earnings as Nvidia posted an earnings per share of 81 cents that would have been 96 cents if not for the incurred charge. The company said it expects revenue for the current quarter to be around $45 billion, and anticipates an $8 billion loss in H20-related revenue due to the export restrictions. Huang, founder and CEO of Nvidia, pointed to the strength of the company's artificial intelligence business in a press release accompanying the release - despite political tensions. "Countries around the world are recognizing AI as essential infrastructure - just like electricity and the internet," Huang wrote.

Wall Street Is Betting Nvidia Can Outrun Geopolitics

"Global demand for NVIDIA's AI infrastructure is incredibly strong," CEO Jensen Huang said in a statement. "AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate." Indeed, U.S. hyperscalers like Microsoft, Amazon and Meta are spending billions on Nvidia products to fuel their AI ambitions. The latest numbers don't point to anything like a slowdown. "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation," Huang said." Meanwhile, an hour before earnings, the Financial Times reported that President Trump directed US chip-design software makers to stop selling their products to Chinese groups.

Nvidia's Revenue Hits Record High, But China Sales Restrictions Squeeze Profits

Nvidia's (NVDA) first-quarter revenue rose to a record high, topping analysts' expectations, but earnings missed as the chipmaker took a hit from new export curbs. Nvidia reported adjusted earnings of 81 cents per share on revenue that jumped 69% year-over-year to a record $44.06 billion. The gains came as sales from Nvidia's data center segment, representing the bulk of the company's revenue, grew 73% to a record $39.1 billion. "Global demand for NVIDIA's AI infrastructure is incredibly strong," CEO Jensen Huang said in a release. Nvidia's quarterly sales exceeded analysts' estimates compiled by Visible Alpha, but earnings did not, as the company said it absorbed a $4.5 billion charge in the period due to restrictions on the sale of its H20 chips to China, less than the $5.5 billion the company said it anticipated last month. Without the charge and related tax impact, Nvidia said it would have reported EPS of 96 cents, above estimates. In the current quarter, Nvidia said it expects to take an $8 billion hit due to lost revenue from H20 sales. The chipmaker projected quarterly revenue of $45 billion, plus or minus 2%, and slightly below Street expectations. Nvidia shares gained over 5% in after-hours trading. The stock was up just under 1% for 2025 through Wednesday's close.

Nvidia, Other Chip Stocks Slide Amid Worries About US-China Trade Tensions

Kara Greenberg is a senior news editor for Investopedia, where she does work coordinating, writing, assigning, and publishing multiple daily and weekly newsletters. Prior to joining Investopedia, Kara was a researcher and editor at The Wire. Earlier in her career, she worked in financial compliance and due diligence at Loomis, Sayles & Company, and The Bank of New York Mellon. Nvidia (NVDA) and other semiconductor stocks slid Friday amid worries about worsening U.S.-China trade tensions. President Trump on Friday said China has "totally violated its agreement with us," dampening hopes the countries would soon come to a longer-term agreement after reaching a temporary truce earlier this month. Separately, Bloomberg reported Friday that Trump plans to expand U.S. companies' licensing requirements to make deals with Chinese companies that have ties to sanctioned firms. The development comes after the Trump administration moved earlier this month to rescind the Biden-era AI diffusion rule that would have further curbed sales of American AI hardware to a broader group of countries, but warned it's looking to replace the rule with new restrictions. Analysts at Citi and Deutsche Bank warned at the time that they could turn out to be stricter than Biden's. During Nvidia's earnings call on Wednesday, CEO Jensen Huang said it's "terrific" that Trump rescinded the Biden-era rule, but criticized the administration's other moves to limit its sales to China, saying that "shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position." The AI chipmaker took a $4.5 billion charge in its fiscal first quarter associated with new export curbs on the company's H20 chips to China, and said it expects to take an $8 billion hit in the current quarter due to lost revenue.

Nvidia Posts Record Revenue But Faces $4.5B Hit from China Chip Ban

Nvidia closed out its first fiscal quarter with strong earnings that beat Wall Street expectations, but CEO Jensen Huang said tightening export restrictions on the company's A.I. chips to China have effectively shut Nvidia out of one of the world's largest A.I. markets. Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters "With half of the world's A.I. researchers based there, the platform that wins China is positioned to lead globally. Today, the $50 billion China market is effectively closed to U.S. industry," Huang said on a call with analysts yesterday (May 28). "The question is whether one of the world's largest A.I. markets will run on American platforms. America wins when A.I. models like DeepSeek and Qwen run best on American infrastructure." Nvidia reported $44.1 billion in revenue for the February-April quarter, up 69 percent from the same period last year. The company's data center business, which includes the sale of A.I. chips, generated $39.1 billion in revenue, a 73 percent year-over-year increase. Quarterly net income came in at $18.8 billion, up 26 percent from last year. However, gross margins fell to 61 percent -- the company's lowest since 2022. Nvidia shares rose more than 4 percent today following the financial results. During the quarter, Nvidia incurred a $4.5 billion inventory write-down tied to unsold H20 chips, which were custom-built for the Chinese market to comply with federal regulations prohibiting U.S. companies from selling advanced A.I. chips to China. New export restrictions imposed by the Trump administration, which took effect in April, banned the use of H20 in Chinese supercomputing and military projects. Unlike earlier policies, the new rules included no grace period for Nvidia to sell existing inventory or fulfill pending orders. Huang explained that the H20 chip has no alternative buyers, leaving Nvidia to absorb the cost of idle inventory. Still, Huang emphasized that global demand for A.I. infrastructure continues to accelerate. "A.I. is growing faster and will be larger than any platform shifts before," he said. "Every nation now sees A.I. as core to the next industrial revolution -- a new industry that produces intelligence and foundational infrastructure for every economy. Nations are investing in A.I. like they once did in electricity and the Internet." Huang also pointed to strong demand for Nvidia's latest A.I. platforms, including the new Blackwell NVL72 -- a rack-scale A.I. supercomputer he described as "a thinking machine designed for reasoning." "This is the start of a powerful new wave of growth. We have more orders today than we did the last time I spoke about orders at GTC," he said. "Grace Blackwell is in full production, and we now have multiple significant growth engines."

Nvidia reports record-breaking $44 billion revenue as AI chip demand skyrockets despite China export ban

Nvidia (NASDAQ: NVDA), the world's leading maker of AI semiconductors, blew past Wall Street expectations on Wednesday(May 29), reporting record-breaking revenue and data center sales that underscored the insatiable global demand for artificial intelligence infrastructure. Despite geopolitical headwinds and a hefty $4.5 billion charge tied to US export curbs on its H20 chips to China, the company reaffirmed its status as the bellwether of the AI boom. The company reported fiscal Q1 revenue of $44.06 billion, up 69 percent year-over-year, crushing analyst expectations of $43.31 billion. Earnings per share came in at $0.96 adjusted, beating the Street's estimate of $0.93. Net income rose to $18.8 billion, or $0.76 per share, from $14.9 billion a year ago. In extended trading, Nvidia shares surged over 6 percent, hitting levels last seen in February and positioning the stock to potentially overtake Microsoft as the most valuable publicly traded company by market capitalization. Nvidia's data center division, which includes AI chips and networking gear, posted a record $39.1 billion in sales, a 73 percent annual increase, and now accounts for a staggering 88 percent of the company's total revenue. Microsoft alone has deployed "tens of thousands" of Nvidia's Blackwell GPUs and is expected to scale to "hundreds of thousands," according to CFO Colette Kress. CEO Jensen Huang called the demand for AI systems "incredibly strong," noting that AI inference token generation has grown tenfold in just one year. "As AI agents become mainstream, the demand for AI computing will accelerate," Huang told investors on the company's earnings call. Despite the blockbuster quarter, Nvidia took a $4.5 billion inventory charge related to new U.S. restrictions on the export of its H20 chips to China. The company estimated it lost $2.5 billion in additional sales from the China market, which Huang said is now "effectively closed to U.S. industry." "The H20 export ban ended our Hopper data center business in China," Huang said bluntly. He criticized U.S. policy assumptions, saying, "Shielding Chinese chipmakers from U.S. competition only strengthens them abroad and weakens America's position." CFO Kress added that the curbs would likely have a "material adverse impact" going forward and benefit foreign competitors. Nvidia expects second-quarter revenue of around $45 billion, about $750 million shy of analyst estimates, largely due to the China-related setback. Nvidia's gaming business, once its core, grew 42 percent year-over-year to $3.8 billion, driven by continued demand for high-end GPUs used in both gaming and AI development. The automotive and robotics division jumped 72 percent to $567 million, thanks to increased adoption of Nvidia's chips in self-driving technologies. Meanwhile, its professional visualization segment, which includes high-performance workstations for AI and 3D modeling, rose 19 percent to $509 million. Huang also threw his support behind President Trump's reshoring initiative, emphasizing Nvidia's investments in American manufacturing. He pointed to TSMC's plans for multiple Arizona fabs and upcoming AI supercomputer facilities in Texas as part of Nvidia's long-term commitment. "The US will always be Nvidia's largest market and home to the largest installed base of our infrastructure," Huang said. Despite regulatory headwinds, Nvidia remains confident in its long-term trajectory. It spent $14.1 billion on share buybacks and issued $244 million in dividends during the quarter. The company forecasts gross margins around 72 percent for the current quarter, aiming to reach the mid-70 percent range later this year. Nvidia shareholders and AI investors will be watching closely when Huang delivers his keynote at GTC Paris on June 10-12, where he is expected to reveal developments in quantum GPU computing, robotics, and global AI partnerships.

AI chipmaker Nvidia's revenue jumps 69% to $44.1 billion

Nvidia said Wednesday that sales in its most recent quarter rose 69% from a year earlier to $44.1 billion. Its net income rose 26% to $18.78 billion. The company exceeded Wall Street's expectations for sales of $43.28 billion, but fell short of predictions for a profit of $19.49 billion. Nvidia's business prospects have been whipsawed by the U.S. government lately. Last month, the government blocked the sale of artificial intelligence chips to China. Weeks later, it approved the sale of similar chips to the Middle East. Amid the turmoil, Nvidia still maintained its breakneck growth as the leading provider of the computer chips used for building AI. Nvidia said Wednesday that sales in its most recent quarter rose 69% from a year earlier to $44.1 billion. Its net income rose 26% to $18.78 billion. The company exceeded Wall Street's expectations for sales of $43.28 billion, but fell short of predictions for a profit of $19.49 billion. Nvidia's revenue and profit rose even though, it said Wednesday, the Trump administration's restrictions on chips to China would cost it $4.5 billion, $1 billion less than it estimated in mid-April. The restrictions have pushed Nvidia out of the market for AI chips in China, the world's largest buyer of semiconductors, which are used to power smartphones, cars and other electronics. Nvidia also projected that revenue in the current quarter would rise 50% from a year ago to $45 billion, as it expands sales of its newest AI chip. . Shares in Nvidia rose more than 4% in after-hours trading. It finished the trading day as the second-most-valuable company in the world behind Microsoft and ahead of Apple, with a market value of $3.3 trillion. "Every nation now sees AI as core to the next industrial revolution," Jensen Huang, Nvidia's CEO, said during a call with analysts Wednesday. The company is showing its strength, even among the tech industry's largest companies. For the first time in the AI era, its quarterly sales surpassed those of Meta, the social media pioneer. Nvidia's net income was 13% larger than Meta's profit in their most recent quarters.

Nvidia shares rise as sales hit from China export curbs not as bad as feared

Nvidia beat quarterly sales expectations as customers stockpiled its AI chips before fresh U.S. curbs on China exports took effect, but the same restrictions will slice off $8 billion in sales from the company's current quarter, forcing the company to offer a forecast below Wall Street estimates on Wednesday. Shares of the world's most valuable semiconductor firm still rose 5% in extended trading as investors digested news that the hit in the current fiscal second quarter was not as bad as feared, and Nvidia talked up demand for its new Blackwell chips from customers including Microsoft. The stock is relatively flat so far this year, compared with 2024 when the shares nearly tripled in value. Nvidia now faces trade restrictions on what it can sell, and the AI data center market is also maturing. Washington's years-long efforts to thwart Beijing's access to top-of-the-line U.S. technology have resulted in stricter restrictions on the export of Nvidia's AI chips - stifling the company's access to one of the largest markets for semiconductors. Midway through a conference call with analysts, CEO Jensen Huang made impassioned remarks about U.S.-China policy, saying that Nvidia was at risk of being cut off from China's massive AI developer base and arguing that China's chip industry was sophisticated and closing in on the United States' dominance. But he praised U.S. President Donald Trump's recent move to rescind a so-called AI diffusion rule that would have regulated global flows of U.S. AI chips. "President Trump wants America to win. And he also realizes that we're not the only country in the race," Huang said. Huang told analysts that Nvidia's Hopper chips could no longer be modified for the Chinese market but did not comment on its Blackwell chips. Reuters has reported that Nvidia is preparing a Blackwell variant for the Chinese market. Though unlikely to make up for the loss in Chinese revenue, a spate of new deals that Nvidia signed earlier this month in the Middle East could offer fresh avenues of growth - including the first phases of a 10-square-mile data center site in the United Arab Emirates that could eventually use 5 gigawatts' worth of AI infrastructure. The company has also announced similar deals in Saudi Arabia and Taiwan. "We have a line of sight to projects requiring tens of gigawatts of Nvidia AI infrastructure in the not-too-distant future," Nvidia Chief Financial Officer Colette Kress said on the conference call. But in the shorter term, restrictions on China exports will hurt. Kress said data center revenue in that country declined. U.S. restrictions on the sale of Nvidia's H20 chips to China, the only AI processors it could legally export to the country, prompted Nvidia to disclose in April that it expected a $5.5 billion charge, while Huang had in May pegged the revenue impact related to the restrictions at about $15 billion. On Wednesday, Nvidia said the actual first-quarter charge due to the H20 restrictions was $1 billion less than expected because it was able to reuse some materials. It said it lost $2.5 billion in H20 sales in the first quarter and expected to miss $8 billion in the second quarter. However, Nvidia also said the H20 brought in $4.6 billion in sales in the first quarter and that China accounted for 12.5% of overall revenue in the first quarter. Gil Luria, an analyst with D.A. Davidson, said the overall impact of the H20 restrictions was less than feared. "There was a removal of some China revenue from the July quarter guides, but there was also China revenue that was pulled into the first quarter. Chinese buyers were stocking up on H20 ahead of the restrictions, which is what propped up the April quarter," Luria said. Though major cloud companies such as Microsoft and Alphabet have stood their ground on the billions they have earmarked this year for spending on expanding infrastructure for AI data centers, worries about such spending persist amid rapidly changing global trade policies. On an adjusted basis, Nvidia earned 81 cents per share in the first quarter. Analyst estimates varied widely as Wall Street tried to assess the impact of restrictions on some of Nvidia's chip sales to China. Excluding the charges, first-quarter adjusted earnings per share would have been 96 cents. According to data compiled by LSEG, the estimate for the company's adjusted quarterly earnings was 93 cents per share, with 17 analysts providing estimates after April 15 when Nvidia said H20 shipments would require additional licenses. Nvidia's data center segment revenue was $39.1 billion in the first quarter, compared with analyst estimates of $39.3 billion, according to LSEG data. The company said it has $29.8 billion in commitments to have its products manufactured, an increase from the year before but down quarter-over-quarter. Nvidia, a bellwether of the artificial-intelligence market, expects revenue of $45 billion, plus or minus 2%, in the second quarter, compared with analysts' average estimate of $45.90 billion, according to data compiled by LSEG. The forecast includes a loss in H20 revenue of about $8 billion due to the recent export limitations. "The broader concern is that trade tensions and potential tariff impacts on data center expansion could create headwinds for AI chip demand in upcoming quarters," said Emarketer analyst Jacob Bourne. "This doesn't signal an end to Nvidia's dominance, but highlights that sustaining it will require navigating an increasingly complex landscape of geopolitical, competitive, and economic challenges."

NVIDIA Stock Skyrockets By 5.5% In After Hours As Firm Beats Q1 Revenue Estimates

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Chip designer NVIDIA Corporation's shares soared in aftermarket trading after its revenue and earnings for the first fiscal quarter beat analyst estimates. NVIDIA posted $44 billion in revenue and 96 cents in adjusted earnings per share, excluding the impact of US sanctions on its GPU sales to China. As part of her prepared remarks, NVIDIA CEO Colette Kress shared that her firm would take a $8 billion hit in the current quarter's sales due to H20 chip restrictions as her firm guided $45 billion in revenue for the second fiscal quarter. Out of the three primary line items in its income statement, only NVIDA's revenue of $44 billion beat analyst estimates of $43.29 billion. The other two items, namely the gross margin and the earnings per share, both missed the estimates. NVIDIA posted 61% in adjusted gross margin, which missed the estimate by ten percentage points, while the firm's 81 cents in adjusted EPS missed analyst estimates of 93 cents. However, the EPS miss is attributed to a ban in its GPU sales, as excluding their impact, the firm would have earned 96 cents in EPS. NVIDIA's business division revenue didn't meet expectations either. The firm earned $39.1 billion, $34.2 billion, $4.96 billion and $567 million in data center, compute, networking and automotive revenue, respectively. Among these, only networking sales beat analyst estimates of $3.54 billion while all other missed them. Analysts had pegged the firm to rake in $39.2 billion data center sales. As for the guidance, NVIDIA missed analyst estimates of $45.5 billion by $500 million as it guided $45 billion in Q2 sales. Within this figure, the firm estimates that it will miss out on $8 billion of GPU sales to China due to US restrictions. NVIDIA added that it was unable to ship $2.5 billion worth of products in the previous quarter due to the restrictions. The sanctions have also left the firm wondering whether it can develop chips to sell in the Chinese AI markets. In its 10-Q filing, NVIDIA outlined that it might "be unable to create a competitive product for China's data center market that receives approval from the USG." Should it be unable to develop such a product, NVIDIA believes it would "effectively be foreclosed from competing in China's data center computing/compute market." As part of her remarks, NVIDIA CFO Colette Kress asserted that her firm's Blackwell "architecture ramp expand[ed] to all customer categories, while large cloud service providers remained our largest at just under 50% of Data Center revenue." Blackwell is NVIDIA's latest AI GPU lineup, and Kress added that the networking business' strong performance can be attributed to higher product sales in Blackwell rack systems. NVIDIA's shares soared in aftermarket trading once investors digested the results. After initially jumping by 3%, the stock added to its gains and was up by 5.5% as NVIDIA's conference call for the earnings report started. The shares are down by 2.5% year-to-date based on today's close as they struggle to scale back the pre-DeepSeek selloff high in January. NVIDIA also tamped down on its costs in the quarter as the firm's $3.58 billion in operating expenses and $3.99 billion in R&D expenses were lower than the respective analyst estimates of $3.63 billion and $4.07 billion.

Jensen Huang Says Biden-Era 'Export Control' Was A Failure: 'If They Don't Have Enough Nvidia, They Will Use Their Own' - NVIDIA (NASDAQ:NVDA)

Nvidia NVDA CEO Jensen Huang erupted at U.S. chip export restrictions during a closed-door media roundtable at Computex 2025, calling the Biden-era rules "a failure" that slashed the company's China market share in half and forced a multibillion-dollar write-off of unsellable H20 GPUs. What Happened: "Export control was a failure," Huang said, pointing to internal estimates that Nvidia's share of the Chinese data-center market fell from "nearly 95%" in 2021 to "only 50%" today, according to a transcript of the Computex Q&A session published by Tom's Hardware. He added that "export controls resulted in us writing off multiple billions of dollars... The write-off of H20 is as big as many semiconductor companies." The CEO stressed that the curbs did not stop Chinese firms from innovating: "If they don't have enough Nvidia, they will use their own! ...the local companies are very, very talented and very determined." Huang also cheered Washington's U-turn on a sweeping licensing scheme that would have capped AI-chip sales to dozens of U.S. allies. "I think it's really a great reversal of a wrong policy," he said of the Trump team's rollback. See also: Disney's 'Lilo & Stitch' Remake Leads Record $326 Million Memorial Day Box Office Weekend The H20 inventory charge, disclosed in April filings, totaled roughly $5.5 billion and wiped out potential China sales estimated at $15 billion. Nvidia now values next year's mainland AI-hardware market at "$50 billion... It would be a shame not to be able to enjoy that opportunity, to bring home tax revenues to the United States, [and] create jobs." Why It Matters: To stay within U.S. limits, Nvidia is rushing lower-spec Blackwell-based accelerators for China that swap costly HBM for GDDR7 and stay under the bandwidth cap, with production slated for June. The company has also told Chinese cloud giants it can ship a downgraded H20 as early as July. Talk of the rollback has already lifted semiconductor shares. Still, rival Huawei's Ascend 910B is clawing share, adding weight to Huang's warning that "AI researchers there are so good, and they're going to build amazing AI no matter what." Price Action: Nvidia shares closed lower by 1.16% to $131.29 on Friday, according to Benzinga Pro. Benzinga Edge Stock Rankings shows that Nvidia had a stronger price trend over the short, medium, and long term. Its momentum ranking was solid, however, its value ranking was poor at the 6.61th percentile. The details of other metrics are available here. Photo Courtesy: jamesonwu1972 On Shutterstock.com Read next: Chamath Palihapitiya Flags Rising Investor Fear As Money Market Fund Assets Hit $7.24 Trillion: 'Market Is Risk-Off' NVDANVIDIA Corp$131.17-1.25%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum82.17Growth98.78Quality93.95Value6.61Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Nvidia Q1 Highlights: China Export Ban Hits Results But Jensen Huang Says Demand 'Incredibly Strong' - NVIDIA (NASDAQ:NVDA)

NVIDIA Corporation NVDA reported first-quarter financial results after market close Wednesday. Here are the key highlights. Nvidia's Key Q1 Figures: Nvidia reported first-quarter revenue of $44.1 billion, up 69% year-over-year and up 12% from the fourth quarter. The revenue beat a Street consensus estimate of $43.2 billion. The company reported first-quarter earnings per share of 81 cents, missing a Street consensus estimate of 88 cents per share. Nvidia faced an export ban on H20 products to China on April 9. The company said it incurred a $4.5 billion charge in the first quarter related to H20 excess inventory and purchase obligations. H20 product sales were $4.6 billion for the first quarter prior to the new export licensing requirements. The company said without the $4.5 billion charge, adjusted quarterly earnings per share would have been 96 cents per share. Nvidia's Q1 Performance By Segment: Nvidia reported record revenue for the company's Gaming segment with news that the company will power the new Nintendo Switch 2 console, shared in the quarter. Here is a look at the revenue performance by operating business segment. What's Next: Nvidia is guiding for second-quarter revenue of $45.0 billion, +/- 2%. The guidance includes the loss of $8.0 billion in H20 revenue due to the export controls. The company is guiding for gross margins between 71.8% and 72.0% for the second quarter. "Our breakthrough Blackwell NVL72 AI supercomputer - a 'thinking machine' designed for reasoning - is now in full-scale production across system makers and cloud service providers," Nvidia CEO Jensen Huang said. Huang added that demand for Nvidia's AI infrastructure is "incredibly strong." "AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and NVIDIA stands at the center of this profound transformation." NVDA Price Action: Nvidia stock is up 2.7% to $138.25 in after-hours trading Wednesday versus a 52-week trading range of $86.63 to $153.13. Read Next: Nvidia Q1 Prediction Is In -- Readers Nailed Tesla, Apple Results, Now 65% Say... Image created using photos from Shutterstock. NVDANVIDIA Corp$139.132.68%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum73.99Growth98.75Quality93.99Value6.41Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Nvidia eases concerns about China with upbeat sales forecast

Nvidia Chief Executive Officer Jensen Huang soothed investor fears about a China slowdown by delivering a solid sales forecast, saying that the AI computing market is still poised for "exponential growth." The company expects revenue of about $45 billion in its second fiscal quarter, which runs through July. New export restrictions will cost Nvidia about $8 billion in Chinese revenue during the period, but the forecast still met analysts' estimates. That helped propel the shares about 4% Wednesday in extended trading. The outlook shows that Nvidia is ramping up production of Blackwell, its latest semiconductor design. The chipmaker -- now the world's largest by revenue and market value -- dominates the field of AI accelerators, the components that help develop and run artificial intelligence models. And an ever-broader lineup of hardware and software is letting Nvidia sell more products to customers.

Is Nvidia a Buy? | The Motley Fool

Here's a look at Nvidia's latest quarterly earnings and management's outlook. Nvidia (NVDA -2.85%) just delivered another record-breaking quarter, sending its stock up 5% and tying Microsoft as the most valuable publicly traded company by market capitalization, at the time of this writing. Despite the strong results, questions linger as the company faces mounting geopolitical pressure and tariff uncertainty. Let's break down the chipmaker's latest performance and explore what the current challenges mean for long-term investors to determine whether Nvidia is a buy, hold, or sell. For the first quarter of fiscal 2026, Nvidia reported $44.1 billion in revenue, representing a 69% year-over-year increase and a 12% increase from its previous quarter, fiscal Q4 2025. Nvidia's net income totaled $18.8 billion, a 26% increase year over year, despite the company incurring a $4.5 billion charge related to new U.S. export restrictions. As for highlights, the company's data center revenue surged to $39.1 billion in the quarter, representing a 73% increase from the prior year. Management also announced that it will be building factories in the U.S. in partnership with others to produce artificial intelligence (AI) supercomputers, which may alleviate some tariff concerns. Additionally, Nvidia continued to return capital to shareholders, with a modest quarterly dividend of $0.01 per share, and repurchased $14.1 billion worth of shares during the quarter. Notably, the management has spent $40 billion over the past 12 months on share buybacks, decreasing its share count by just 0.8% due to the company's massive $3.4 trillion market capitalization. While Nvidia continues to break records, it encountered the aforementioned geopolitical hiccup during the quarter. On April 9, the U.S. government abruptly required Nvidia to secure a license before shipping H20 chips to China. The problem? H2O was already deeply embedded in the company's go-to-market strategy and had generated $4.6 billion in revenue during the quarter. Nvidia was left holding the bag on $4.5 billion worth of unsellable inventory and was unable to ship an additional $2.5 billion in orders before the restrictions took effect. The China market, once seen as a dependable pillar of growth, now represents a major wildcard for Nvidia. With U.S. firms locked out, Nvidia warned that losing access to this near-$50 billion AI accelerator market would materially benefit foreign competitors. Just after Nvidia released its fiscal Q1 earnings, another twist emerged: A federal court blocked President Donald Trump from using emergency powers to impose broad tariffs. While the decision, which the Trump administration intends to appeal, may ease trade tensions for now, it highlights how quickly trade policy can shift and put the brakes on Nvidia's unparalleled growth. Despite the company's geopolitical headaches, Nvidia continues to innovate. Its Blackwell chips -- designed for massive-scale AI workloads -- are the company's next big breakthrough, according to CEO Jensen Huang. To support its growth, the company launched Blackwell Ultra and Nvidia Dynamo during its latest quarter, designed to power the next generation of reasoning AI models. Huang said: Global demand for Nvidia's AI infrastructure is incredibly strong. AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate. Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the center of this profound transformation. To support the development of its Blackwell product, Nvidia announced in April that it will build and test these chips in Arizona and its AI supercomputers in Texas. Given the company's tariff concerns, it's an unlikely coincidence that management chose the U.S. as the location for manufacturing its newest product. Looking ahead, management projects $45 billion in revenue for its next quarter, plus or minus 2%. Notably, that outlook includes an $8 billion hit from ongoing H20 restrictions, which will continue to impact gross margins. When excluding the projected $8 billion loss, management believes it will achieve a range of "mid-70%" gross margins later in its fiscal 2026, which would be in line with its 75% gross margin for its previous fiscal year. Given Nvidia stock's meteoric rise, it still trades at a steep 45 times trailing earnings. Yet the company has largely grown into that premium, with a three-year median price-to-earnings ratio of around 63. As a clear leader in the fast-moving world of artificial intelligence, Nvidia continues to break new ground, most recently with its next-generation Blackwell chips and AI supercomputers. For growth-focused investors seeking exposure to transformative AI technology, Nvidia remains a compelling long-term investment, even amid geopolitical risks and an elevated valuation multiple.

Is Nvidia Stock a Bargain? | The Motley Fool

In a year where artificial intelligence (AI) continues dominating headlines and enterprise spending, one might expect the sector's undisputed leader to be posting spectacular gains. Instead, Nvidia (NVDA 2.01%) has delivered a surprisingly modest 2.3% return year to date as of this writing, barely outpacing the S&P 500's rather modest 0.32% advance in 2025. For a company that became synonymous with the AI boom, this restrained performance raises an intriguing question for growth investors. The disconnect becomes even more puzzling when examining Nvidia's recent financial performance. The chipmaker just reported first-quarter fiscal 2026 results that would make most technology executives envious, with revenue surging 69% year over year to $44.1 billion and guidance pointing toward continued robust growth. Yet the market's tepid response suggests either excessive caution or a compelling buying opportunity. At 21.8 times projected 2028 earnings, Nvidia trades at a reasonable multiple for a company delivering 69% revenue growth and dominating the AI infrastructure market. For investors willing to look past near-term headwinds, the combination of muted stock performance and accelerating fundamentals could represent one of 2025's most compelling value propositions in the technology sector. The primary factor weighing on Nvidia's stock performance has been concerns about U.S. export controls limiting the company's access to the Chinese market. The restrictions, which took effect on April 9, 2025, resulted in a $4.5 billion charge in the first quarter and will cost the company an estimated $2.5 billion in first-quarter revenue and $8 billion in second-quarter revenue from foregone H20 chip sales due to the export restrictions. While these numbers appear substantial, they demonstrate Nvidia's resilience rather than vulnerability. Despite being blocked from selling H20 products specifically designed for China's AI market, the company still managed to deliver $44.1 billion in quarterly revenue and guide toward $45 billion for the second quarter. This represents 50% year-over-year growth even with the China headwinds fully incorporated. More importantly, Nvidia's data center revenue of $39.1 billion grew 73% year over year, with nearly 70% coming from the company's latest Blackwell products. This suggests that demand from other global markets more than compensates for the Chinese restrictions. The company's ability to grow despite losing access to the world's second-largest economy strengthens the investment thesis by proving the breadth and depth of AI adoption worldwide. The standout performer in Nvidia's latest results was the rapid adoption of its Blackwell architecture across both data center and gaming applications. Data center customers are embracing Blackwell-based products faster than anticipated, contributing to the majority of Nvidia's $39.1 billion in segment revenue. Gaming revenue provided another positive surprise, jumping 48% sequentially and 42% year over year as new Blackwell-based gaming products gained traction. This diversification beyond pure AI applications demonstrates Nvidia's ability to monetize its advanced chip architectures across multiple high-growth segments, reducing dependence on any single market vertical. The Blackwell success extends beyond just hardware sales. Nvidia's expansion into networking, software, and services creates additional revenue streams while increasing customer switching costs. The company's Compute Unified Device Architecture (CUDA) software platform remains the industry standard for AI development, creating a moat that competitors struggle to breach. As enterprises move from AI experimentation to production deployment, this comprehensive ecosystem approach positions Nvidia to capture expanding wallet share from existing customers. At 21.8 times projected 2028 earnings, Nvidia isn't cheap by traditional metrics, but it's not expensive relative to its growth trajectory, dominance in AI infrastructure, and unmatched software ecosystem. The company's economic moat, built around its industry-leading GPUs and the ubiquitous CUDA platform, continues to repel challengers, even as AMD and hyperscalers attempt alternatives. As AI enters a new phase defined by autonomous agents, physical-world integration, and multimodal models, Nvidia remains the clear platform leader. No rival is meaningfully close to disrupting that position. For long-term investors, the current valuation may still prove to be a bargain in hindsight.

Prediction: Nvidia Stock Will Soar in 2025 (and It's Due to This 1 Number) | The Motley Fool

Nvidia (NVDA -2.85%) has already delivered spectacular gains for investors, advancing more than 1,400% over the past five years. This is thanks to the company's dominant position in the artificial intelligence (AI) revolution and the resulting explosion in earnings growth. Quarter after quarter, Nvidia's revenue has advanced in the double or triple digits and reached record levels. In recent times, though, against a backdrop of import tariff uncertainties and restrictions on AI chip exports to China, investors have worried about growth ahead, which has weighed on Nvidia's stock, bringing it down 29% from the start of the year to its lowest point in April. Today, along with the rest of the market, Nvidia has rebounded from those lows. This comes amid optimism that the tariff picture won't be as dark as originally expected and as tech customers continue to spend big on Nvidia's products and services. Now, my prediction is that Nvidia's positive momentum may not be over, and the stock will soar in 2025 thanks to one particular number. Let's explore this further. So, first, a quick look at why Nvidia shares have skyrocketed over the past several years. The company is known for its graphics processing units (GPUs), high-powered chips with the ability to handle many tasks simultaneously. They primarily served the gaming market many years ago, but then Nvidia recognized their broad potential and expanded their use into other areas -- and AI stood out as a market where GPUs could shine. In fact, GPUs are central to the most important AI tasks, such as the training and inference of large language models (LLMs), so these models can then go on to do their job of solving complex problems. Nvidia also built out an entire ecosystem of supporting products and services, and all of this has resulted in mind-boggling growth. In the recent fiscal year, revenue soared 114% to $130 billion. This continued into the recent quarter, and the earnings numbers have proven that Nvidia's customers continue to pour investments into the company's products. Revenue advanced 69% to $44 billion during the period, and Nvidia noted a significant increase in demand for inference -- the "thinking" process LLMs go through to tackle questions and problems. Reports from Nvidia customers, such as Meta Platforms and Alphabet, support this positive earnings trend we saw in Nvidia's fiscal 2026 first quarter. These players have said in recent times that AI remains a priority, and they will continue to invest significantly in it -- Meta even increased its capital spending forecast for the year. All of this supports the idea of Nvidia's stock market gains this year. But one number in particular should encourage investors to get in on Nvidia -- and it could help the stock soar in the months ahead. This is a number that reflects the company's high profitability on sales. I'm talking about Nvidia's gross margin. The company has maintained a gross margin above 70% in recent quarters, with it even reaching into the mid-70% range. Earlier this year, Nvidia predicted that first-quarter gross margin would fall to the low-70% range amid the launch of its Blackwell architecture. (Launches involve extra costs, and the Blackwell rollout is particularly complex due to all its features and that it's customizable.) In the recent quarter, Nvidia met its goal, with gross margin settling at 71.3%, excluding the impact of a $1 billion charge related to chips meant for export to China. (If we include the impact of the charge, gross margin on a non-GAAP (non-generally accepted accounting process) basis was 61% and about 60% on a GAAP basis.) From here, Nvidia expects gross margins of 71.8% and 72% in the second quarter, on a GAAP and non-GAAP basis, respectively. The company says that Blackwell will drive continued progress, with forecasts of gross margin in the mid-70% range by later this year. So, Nvidia has delivered strong profitability and aims to continue doing so. Of course, the company still faces some headwinds, particularly U.S. restrictions on chip exports to China. If this situation worsens, it could put the brakes on stock performance, at least in the near term. It will be important to watch how this story plays out. But even with that challenge in mind, I remain optimistic, considering Nvidia's impressive profitability on sales over time. And the ongoing demand for its products and services should keep that momentum on track. That's why I predict that, thanks to Nvidia's solid level of profitability, the stock will soar in 2025.

Is Nvidia Stock a Buy Now? | The Motley Fool

Nvidia (NVDA -2.85%) may be the most watched stock in the market, as it's a bellwether for artificial intelligence (AI) buildout progress. Most of Nvidia's revenue comes from graphics processing units (GPUs) installed in data centers to handle AI workloads. As long as Nvidia continues posting solid results, investors can assume that AI investments are moving full speed ahead. Nvidia recently reported first-quarter fiscal year 2026 results (ended April 28), which were spectacular. However, investors must keep an eye on a few items. Even with some headwinds popping up, is the stock still a buy today? Nvidia's GPUs and the software that supports them are second to none, which is how Nvidia has captured a market share topping 90% in the data center GPU market. Its dominance is like nothing seen in the hardware space, and it bodes well for investors. Nvidia is also growing at a pace never seen for a company of its size. In Q1, Nvidia's revenue rose 69% year over year to $44 billion. However, that pace is expected to slow a bit next quarter, with revenue projected to be about $45 billion, indicating 50% revenue growth. The reason Nvidia's revenue growth is slowing has to do with U.S. government export restrictions. On April 9, Nvidia was informed that it couldn't sell its H20 chips (designed specifically to meet the criteria of previous U.S. export restrictions) without a license, effectively ending the sale of these chips. This caused Nvidia to charge $4.5 billion for excess inventory and fail to realize $2.5 billion in revenue during the first quarter. Before the restrictions, Nvidia sold about $4.6 billion of H20 chips. They also projected sales of around $8 billion in H20 chips during Q2. That would indicate Nvidia's Q2 growth would have been around $53 billion, which would have indicated 77% growth. If you add back in the $2.5 billion in eliminated revenue in Q1, Nvidia's growth rate would have been 79%. For reference, Nvidia's growth during Q4 was 78%, indicating that Nvidia's clients are still spending a lot of money on GPUs, and the growth rate isn't really slowing. This is an extremely bullish indication, as the only thing stopping Nvidia this quarter (and next) is government export restrictions. While investors didn't see a gigantic leg up like they're used to seeing with Nvidia, the market reacted positively to the news and sent Nvidia's stock higher after reporting earnings. But does this make it a stock worth buying here? Because of the one-time charges related to writing off the H20 inventory, Nvidia's trailing-12-month earnings per share (EPS) metric is going to be a bit off, which essentially eliminates the usefulness of the trailing price-to-earnings (P/E) ratio over the next year. Instead, I'll use Nvidia's forward P/E to value the stock. Nvidia isn't the cheapest stock in the world, trading at 33 times forward earnings, but then again, few stocks are growing as rapidly and consistently as Nvidia. Despite the headwind caused by the U.S. government, Nvidia's core business is still intact and doing incredibly well. Demand for GPUs remains high, with no signs of slowing. I still think Nvidia is a solid buy here, and investors need to have the mindset of holding the stock for three to five years, as AI tailwinds are still blowing fiercely in favor of Nvidia.

Better Artificial Intelligence Stock: Nvidia vs. AMD | The Motley Fool

Even with new export controls cutting off a vital market in China, demand for advanced chips used to power artificial intelligence (AI) infrastructure remains high. While there is a growing market for custom AI chips, the most commonly used chips for running AI workloads are graphics processing units (GPUs). This name stems from the fact that these chips were originally designed to speed up graphics rendering in video games. Due to their powerful processing speeds, GPUs are now used for a variety of high-power computing tasks, such as training large language models (LLMs) and running AI inference. The GPU market is basically a duopoly at this point, headed by Nvidia (NVDA 1.69%) and Advanced Micro Devices (AMD 3.52%). The question many investors ask, though, is: Which stock is the better buy? The unquestioned leader in the GPU space is Nvidia, which commands an over 80% market share. Not only is Nvidia larger than AMD, but it's also been growing its data center revenue more quickly. Last quarter, Nvidia grew its data center revenue by 73% to $39.1 billion, while AMD's data center revenue jumped 57% to $3.7 billion. Nvidia's advantage comes from its software platform, CUDA. It launched the free software platform all the way back in 2006 as a way to let developers program its GPUs for different tasks in an effort to expand beyond the video game market. The company pushed the use of the software to universities and research labs, which made it the software program upon which developers were taught to program GPUs. While AMD made some half-hearted efforts with software, it didn't launch a true CUDA competitor until around 10 years later with ROCm. By that time, CUDA had already become the default software used to program GPUs, and ROCm was still behind with less hardware support, limited documentation, and more difficulty to install and use. Meanwhile, Nvidia has since expanded upon its software lead through a collection of AI-specific libraries and tools built on top of CUDA, called CUDA X, which helps bolster the performance of its chips for AI tasks. Ultimately, CUDA has given Nvidia a big network effect advantage. The more CUDA is used, the more tools and libraries are built for it, making Nvidia GPUs all the stickier. While ROCm continues to improve, it still trails CUDA, especially for use in LLM training. However, where AMD has been able to gain more traction is in AI inference. Training AI models is a much more difficult task, which is why Nvidia has dominated this market and where its CUDA advantage really shines through. Inference, on the other hand, is easier, and there is more of a focus on things such as latency, power consumption, and cost. Due to its competitive positioning, AMD's GPUs tend to be less expensive than those from Nvidia, and while its ROCm software trails CUDA, it is generally considered good enough for running most AI inference workloads. The good thing for AMD is that the inference market is eventually expected to become the much larger of the two markets. In fact, some pundits, including venture capitalist and former Facebook executive Chamath Palihapitiya, have said the inference market could be up to 100 times larger than the market for training AI models. But whether the inference market becomes 2 times bigger or 100 times than the training market, AMD could have an opportunity to gain some market share. When it comes to valuation, both stocks trade in a similar range. Nvidia has a forward price-to-earnings (P/E) ratio of just over 32 times this year's analyst estimates, while AMD is at 28 times. Nvidia, meanwhile, is growing its revenue more quickly. With their valuations similar, the key factor to which stock will outperform in the coming years will largely come down to growth. Nvidia is the clear leader in the GPU space and should continue to see strong growth as the AI infrastructure buildout continues. However, its AI data center revenue is now 10 times that of AMD. so the law of large numbers can come into play. As AI infrastructure begins to shift more toward inference, AMD should have a nice opportunity to take some market share. Nvidia still has the lead in inference, but the gap is narrower compared to training. AMD also doesn't need to take a lot a of share in what could be a rapidly growing market to really make a big difference off its much smaller AI data center revenue base. As such, there is a good possibility it could begin to grow more quickly than the much bigger Nvidia. If that happens, I think its stock will outperform. Ultimately, investors can own both stocks, which is probably a good idea. With AI infrastructure spending still appearing to be in its early days, both should be winners, although I do think AMD has more potential upside. The biggest risk, meanwhile, would be if AI spending unexpectedly starts to slow.

Why Nvidia Stock Dropped to End the Week | The Motley Fool

Investors may have thought they missed out after Nvidia (NVDA -2.85%) shares popped yesterday from its fiscal 2026 first-quarter earnings report. But what a difference a day makes. Anyone who regretted missing yesterday's gains has another chance. Nvidia stock ended Friday's session down 2.9%, which is about in line with where it closed prior to the earnings pop yesterday. There were good reasons for both days' moves. The advanced semiconductor chip and artificial intelligence (AI) software company exceeded expectations for fiscal Q1 sales with a record $44.1 billion in revenue. The results had a bit of an asterisk, though. Restrictions on exports of its H20 chip into China led it to take a $4.5 billion charge in the quarter. China is a meaningful market for Nvidia as sales represented 13% of total revenue last year. The company is planning for more lost sales, too. Fiscal Q2 guidance included the loss of another $8 billion in H20 sales. Yet management still thinks record quarterly earnings are likely in the current quarter. With the business humming on all cylinders other than in China, investors got excited to jump into the stock yesterday. But China played a big role in today's stock decline too. President Trump indicated that trade tensions were reaccelerating as he claimed China violated agreements made earlier this month in Geneva. In the quarterly call for investors, CEO Jensen Huang noted the impact a loss of the China market represented. He stated, "Today, however, the $50 billion China market is effectively closed to U.S. industry. The H20 export ban ended our Hopper Data Center business in China."

Jensen Huang Just Delivered a Startling Message About Nvidia's Future in China | The Motley Fool

To use an old saying, the world was Nvidia's (NVDA -2.85%) oyster. The company reached out to global markets as it wished, selling its top artificial intelligence (AI) chips and generating explosive growth. But in more recent times, the U.S. -- beginning with the administration of former President Joe Biden and continuing with current President Donald Trump -- has put in place certain restrictions. The Biden administration in 2022 launched export controls, limiting the types of AI chips that could be sold to the major market of China, then earlier this year issued the AI Diffusion Rule to further strengthen that position. The Trump administration recently revoked the diffusion rule, but said it would replace it with other guidelines soon. Meanwhile, Nvidia received notice several weeks ago that it could no longer sell its previously approved H20 chips to the Chinese market due to a U.S. government rule, and this resulted in a billions-dollar charge for the company. It's important to remember that in the last fiscal year -- the 12 months ended Jan. 26, 2025 -- China represented 13% of Nvidia's revenue, so if the restrictions continue at this level, they will weigh on growth. That's why investors have paid close attention to Nvidia CEO Jensen Huang's comments and plans regarding the situation. And he just delivered a startling message during the recent earnings call. Let's take a look at what it could mean for the stock. Nvidia had specifically designed the H20 AI chip, based on its Hopper architecture, to respect the U.S. government's guidelines and had earned approval to export it. But, back in April, it received word from the government that it couldn't export the H20 without a license. The U.S. hasn't yet issued such licenses to chip companies. As a result, Nvidia was left with H20s it was unable to export, and it announced a $5.5 billion charge linked to that. In the company's earnings report this week, it lowered this to $4.5 billion as it was able to repurpose certain H20 materials. Nvidia's market share in China also has progressively declined from 95% about four years ago to 50% today. Now, let's consider Huang's startling message about Nvidia's future in China. "China is one of the world's largest AI markets and a springboard to global success," Huang said. "Today, however, the $50 billion China market is effectively closed to U.S. industry. We are exploring limited ways to compete, but Hopper is no longer an option." The company's chief financial officer, Colette Kress, also said that the potential loss of China's AI accelerator market would have "a material adverse impact on our business." Now, let's consider what this could mean for Nvidia. It's true that in the worst-case scenario, the company would completely lose access to China permanently, and this could weigh on its ability to grow. But two elements make me optimistic this scenario won't play out. First, it's important to note that Huang generally is very resourceful and proactive. After all, he quickly led Nvidia's development of the H20 to respect guidelines and maintain a presence in China. So, it's clear he and his team are prioritizing this problem and may find ways to limit the damage. Second, Huang hasn't tried to minimize the potential impact of closing the door to the Chinese market. He's sounding the alarm bell in a pretty loud way and clearly explaining how extremely restrictive policies could harm U.S. companies. This could encourage the Trump administration, as it considers new guidelines, to turn things around and allow U.S. companies such as Nvidia some access to the market. Meanwhile, it's important to note that through the latest fiscal year, the U.S. is by far the company's biggest market, generating $61 billion in revenue out of the company's total of $130 billion. And revenue from companies with billing addresses in all other geographic regions has climbed significantly. So, though a complete halt to China sales clearly would hurt Nvidia's growth, the company still continues to advance -- and lead -- in other areas throughout the world. What might this mean for the stock? If the worst-case scenario happened, it likely would weigh on stock performance, at least in the short term. On a brighter note, I don't think this is a situation that would destroy Nvidia's long-term value considering the company's leadership in AI throughout the rest of the world. But, as mentioned, I'm optimistic a middle-of-the-road solution may be found, allowing Nvidia at least some opportunity in China, and if this happens, Nvidia shares could soar.

Prediction: Nvidia Will Beat the Market. Here's Why | The Motley Fool

Nvidia (NVDA 1.69%), the world's largest producer of discrete graphics processing units (GPUs), saw its stock surge 25,250% over the past 10 years as the S&P 500 advanced less than 180%. From fiscal 2015 to fiscal 2025 (which ended this January), its revenue rose at a compound annual growth rate (CAGR) of 39% as its net income increased at a CAGR of 61%. That explosive growth was initially fueled by its brisk sales of gaming GPUs, which were also used to mine certain cryptocurrencies. But over the past few years, its expansion was primarily driven by its soaring shipments of data center GPUs for the artificial intelligence (AI) market. Unlike central processing units (CPUs), which process single pieces of data at a time, GPUs process a broad range of integers and floating numbers simultaneously. That advantage makes them better suited than stand-alone CPUs for processing complex AI tasks, so the rapid expansion of the AI market generated explosive tailwinds for its sales of data center GPUs. But since the start of 2025, Nvidia's stock rose less than 4% as the S&P 500 stayed nearly flat. The Trump administration's unpredictable tariffs, tighter curbs on exported chips, and the delays for its latest Blackwell chips all caused Nvidia to lose its luster. However, I believe Nvidia's stock can stay ahead of the S&P 500 this year for five simple reasons. Nvidia controlled 82% of the discrete GPU market at the end of 2024, according to JPR. Its closest competitor, AMD, held a 17% share, while Intel -- which returned to the discrete GPU market in 2022 -- controlled just 1% of the market. Nvidia also controls about 98% of the data center GPU market, according to TechInsights. The remaining 2% is split between AMD and Intel. Nvidia's dominance of that booming market, which is supported by the widespread usage of its older A100 chips and current-gen H100 and H200 chips, makes it tough for its competitors to gain a meaningful foothold. The global AI market could still expand at a CAGR of 31% from 2025 to 2032, according to Markets and Markets. If Nvidia merely matches that growth rate, its annual revenue would surge from $130.5 billion in fiscal 2025 to $1.31 trillion by fiscal 2032. So assuming it maintains roughly the same valuations, its stock still has a clear path toward delivering a ten-bagger gain over the next seven years. Nvidia reinforces its dominance through its proprietary Compute Unified Device Architecture (CUDA) programming platform. When software developers write their AI applications in a parallel code (such as C++ or Python) on CUDA, those applications become optimized for Nvidia's GPUs but can only be executed on its chips. If a developer wants to run that same application on an AMD or Intel GPU, it needs to be rewritten in other frameworks. In addition, most libraries, frameworks, and deep learning models are optimized for CUDA instead of other platforms. That stickiness should keep Nvidia well ahead of its competitors for the foreseeable future. China accounted for just 12.5% of Nvidia's revenue in fiscal 2025, compared to 16.9% in fiscal 2024 and 21.5% in fiscal 2023. That decline was mainly caused by America's tighter export curbs on its high-end data center GPU shipments to China. Nvidia tried to counter those challenges by selling less powerful, modified versions of its flagship GPUs. However, those versions (like the scaled-back H20 variant of its H100 and H200 chips) were also recently added to the growing list of banned U.S. chip shipments to China. That sounds like grim news for Nvidia, but it can still easily offset its declining revenues in China with its growth in its other, less controversial markets. That's why its revenue grew at a CAGR of 120% from fiscal 2023 to fiscal 2025, even as the export curbs choked its Chinese business. Nvidia generated 89% of its revenue from its data center chips in the first quarter of fiscal 2026. However, its smaller gaming, professional visualization, automotive, and OEM segments also grew year over year alongside its core growth engine. Its gaming business benefited from its rollout of its new RTX Super GPUs. Its professional visualization segment grew as it launched more design-oriented chips and expanded its Omniverse platform for digital projects, and its automotive chip sales improved as more Chinese automakers integrated its Drive platform into their electric vehicles. These oft-overlooked businesses should continue expanding in the shadow of its massive AI data center business. From fiscal 2025 to fiscal 2028, analysts expect Nvidia's revenue and earnings per share to grow at CAGRs of 31% and 29%, respectively. Yet its stock still looks reasonably valued at 34 times this year's earnings. So once investors realize that its near-term issues won't affect its long-term growth, Nvidia's stock should outperform the market for the rest of the year.

Nvidia Takes $4.5B Inventory Charge Due to Chip Trade Policy | PYMNTS.com

Nvidia posted $44.06 billion in Q1 revenue, up 69% year over year, with data center revenue jumping 73% to $39.1 billion. Nvidia CEO Jensen Huang told analysts Wednesday (May 28) that recent U.S. export-control changes are reshaping the company's growth plans in China even as global demand for artificial intelligence (AI) infrastructure accelerates. The new rules require U.S. chipmakers to secure licenses before shipping certain advanced devices to China. Huang said the restrictions effectively remove a market he values at roughly $50 billion and have forced Nvidia to take a $4.5 billion inventory charge on its H20 processor, a version of its flagship AI chip designed to meet earlier compliance thresholds. "We cannot further reduce the chip's performance to stay within the regulations, so it is inventory we cannot sell or repurpose," he said. While acknowledging that Chinese firms will continue building AI capabilities, Huang framed the policy debate in competitive rather than political terms: "Export-control decisions should strengthen U.S. technology platforms," he said, adding that the company remains engaged with policymakers and customers to find compliant paths forward. But new U.S. export controls have effectively "closed" the $50 billion Chinese market to American companies, Huang said. Nvidia took a $4.5 billion charge for excess inventory on the H20 chip, which was made specifically for the Chinese market under Biden's export rules. Read more: Nvidia and Partners to Produce AI Supercomputers in US However, the current administration now requires a license to ship those chips, which effectively ended this business for Nvidia. "We cannot reduce (the H20 chip) further to comply. As a result, we are taking a multibillion-dollar write-off on inventory that cannot be sold or repurposed," he said. Despite the China setback, Nvidia is pushing ahead with AI infrastructure projects worldwide to meet soaring demand for AI workloads. Its projects globally include: Huang said Nvidia's goal is to have chips and systems "built in America within a year," citing investments to bring back advanced manufacturing. Read more: Nvidia and Amazon Land Middle Eastern AI Deals Amid Trump Visit Nvidia is building infrastructure because demand for AI inference is soaring, according to Huang. This refers to AI workloads in which new data is applied to trained models to generate outputs. With reasoning models, where AI agents think back and forth while accessing tools and doing other tasks, the number of tokens (or word clusters) they generate is exploding. More tokens means more compute power is needed, which is where Nvidia's chips come in. "The number of tokens reasoning goes through is 1,000 times more than a one-shot chatbot," Huang said. Other areas of growth include enterprise and industry AI. With enterprise AI, Huang said Nvidia will bring its AI infrastructure to companies, most of whom still keep their data on premises at their own data centers instead of the cloud. Nvidia has put together a compute, storage and networking solution and is getting ready to go to market with it. For industrial AI, Huang said Nvidia offers advancements in robotics, omniverse and working to embed AI into manufacturing operations. According to recent research note from Bank of America Global Research shared with PYMNTS, Nvidia is expanding its portfolio, with a broad set of AI products across cloud, enterprise, humanoid robots, workstation, gaming, software libraries, quantum and 6G. This is what underpins what the chipmaker has called the "multitrillion-dollar AI factory" industry, analysts said. Read more: Nvidia Reportedly Aiming to Expand AI Business Beyond 'Hyperscalers' In its fiscal first quarter, Nvidia reported net income of $18.77 billion, or 76 cents per share, compared with $14.88 billion, or 60 cents per share, in the like quarter a year earlier. Revenue rose 69% to $44.06 billion, up from $26.04 billion year over year. Data center revenue was up 73% to $39.1 billion in the quarter from a year ago. The company said AI inference workloads has taken off, soaring tenfold in one year. The earnings results exceeded Wall Street's expectations of net income of $18.2 billion in the first quarter on revenue of $43.3 billion. Shares of Nvidia rose by 6% to $143.03 in after-hours trading. "Nations are investing in AI infrastructure like they once did for electricity and the internet," Huang said. "The age of AI is here, from AI infrastructures, inference at scale, sovereign AI, enterprise AI and industrial AI. Nvidia is ready."

Nvidia shares pop on strong AI demand despite hit from China chip...

Nvidia reported strong demand for its AI chips and solid first-quarter results on Wednesday, providing some relief to anxious investors who have come to see the world's leading chip supplier as a bellwether for the overall tech industry. The Jensen Huang-led company reported earnings of 96 cents per share on sales of $44.06 billion for the quarter ending in April. Both numbers came in higher than Wall Street's expectations, with revenue up 69% compared to one year ago. according to data compiled by LSEG. However, President Trump's move to slap fresh export controls on Nvidia's shipments to China weighed on its guidance. Nvidia expects revenue of about $45 billion in the fiscal second quarter - with a loss of $8 billion in expected sales of H20 chips that would have been shipped to China. Nonetheless, the stock jumped 4% in after-hours trading following the better-than-expected earnings, which were released after the closing bell. The restrictions on the sale of Nvidia's H20 chips to China, the only AI processors it could legally export to the country, prompted Nvidia to disclose in April that it expected a $5.5 billion charge -- temporarily sending the markets into a tailspin. On Wednesday, Nvidia said the actual first-quarter charge due to the H20 restrictions was $1 billion less than expected because it was able to reuse some materials. Huang put a positive spin on the results and described demand for Nvidia's AI infrastructure as "incredibly strong." "Global demand for Nvidia's AI infrastructure is incredibly strong," Huang said in a statement. "AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate." "Countries around the world are recognizing AI as essential infrastructure -- just like electricity and the internet -- and Nvidia stands at the center of this profound transformation," Huang added. Nvidia said it took a $4.5 billion charge on excess H20 inventory in the first quarter. The company said it would have sold $2.5 billion in additional chips if not for the restrictions. Nvidia's data center business was a bright spot for the quarter, with proceeds jumping 73% to $39.1 billion. Nvidia is at the forefront of the current AI boom, with Google, Microsoft, Meta, Amazon, OpenAI and Elon Musk's xAI among the firms that rely on its chips to power the increasingly complex large language models that underpin their AI tools. Microsoft, Amazon, Meta and Google alone are expected to spend a combined $345 billion this year as they pour resources into the AI race, according to Visible Alpha estimates.

Nvidia Asian suppliers rise on upbeat Q1 earnings, limited China impact By Investing.com

Investing.com-- Shares of Nvidia's Asian suppliers rose on Thursday after the artificial intelligence major clocked strong first-quarter earnings and flagged a limited impact from stricter U.S. curbs on sales to China. Chipmakers and chip-related stocks were the top performers, extending gains from the prior session as investors positioned for a strong print from NVIDIA Corporation (NASDAQ:NVDA). Nvidia clocked better-than-expected earnings in the first quarter, at $0.96 per share against expectations of $0.93. Revenue rose to $44.06 billion, clearing estimates of $43.31 billion. A bulk of the company's earnings came from its data center unit, which is at the heart of Nvidia's AI development. Gaming revenue also rose after Nvidia launched a new line of processors during the quarter. Still, the company flagged a $8 billion hit to second quarter sales from increased U.S. restrictions on chip sales to China. But investors appeared to have largely looked past this forecast, with Nvidia's shares rising as much as 5% in U.S. aftermarket trade. Nvidia CEO Jensen Huang said AI-fueled chip demand remained strong, and that the company was positioned to continue benefiting from this trend in the coming quarters. Such a scenario bodes well for Nvidia's suppliers, who have largely tracked a stellar valuation spike in the chipmaker over the past two years, as AI development picked up. Broader Asian tech and chip stocks also rose on Thursday, as Nvidia's earnings sparked bets that AI demand will continue to buoy tech investment in the coming quarters.

Chip stocks rise as Nvidia eases China demand concerns By Investing.com

Investing.com -- Shares of semiconductor companies are rising premarket on Thursday after Nvidia (NASDAQ:NVDA) offered an earnings outlook that, while impacted by U.S. export restrictions, was not as dire as some investors feared. The move came after Nvidia reported stronger-than-expected first-quarter results as Chinese customers stockpiled its AI chips ahead of new export curbs. While the company warned that current-quarter sales would be hit by about $8 billion due to the restrictions, investors had anticipated worse. Investors were also encouraged by Nvidia's commentary on robust demand for its next-generation Blackwell chips. CEO Jensen Huang said on the earnings call that the company sees "a line of sight to projects requiring tens of gigawatts of Nvidia AI infrastructure." Huang acknowledged that U.S. trade policy continues to weigh on the company's China business but framed President Trump's recent move to rescind the "AI diffusion" rule as a positive shift. "President Trump wants America to win," Huang said. D.A. Davidson analysts said in a note to clients reacting to the report that Nvidia posted "better than expected top-line numbers." However, they acknowledged the "notable impact from the lack of H20 sales into China in Q1 and Q2." "It is our belief that the Street is under-accounting Chinese contribution to NVIDIA revenue and that this topic represents the largest overhang on the stock, which will continue until we have an official position from the Trump administration that will give us resolution on the matter in one direction or the other," stated the firm.

Nvidia forecasts revenue below estimates as US restrictions cost $8 billion in sales

(Reuters) - Nvidia beat sales expectations during its fiscal first quarter but forecast second-quarter revenue below market estimates on Wednesday, expecting an $8 billion hit to sales from tighter U.S. curbs on exports of its AI chips to key semiconductor market China. Shares of the world's most valuable semiconductor firm still rose 3% in extended trading. The stock is relatively flat so far this year, compared with 2024 when the shares nearly tripled in value. Nvidia now faces trade restrictions on what it can sell, and the AI datacenter market is also maturing. Washington's years-long efforts to thwart Beijing's access to top-of-the-line U.S. technology have resulted in stricter restrictions on the export of Nvidia's AI chips - stifling the company's access to one of the largest markets for semiconductors. New U.S. restrictions on the sale of Nvidia's H20 chips to China, the only AI processors it could legally export to the country, prompted Nvidia to disclose in April that it expected a $5.5 billion charge, while CEO Jensen Huang had in May pegged the revenue impact related to the restrictions at about $15 billion. On Wednesday, Nvidia said the actual first-quarter charge due to the H20 restrictions was $1 billion less than expected because it was able to reuse some materials. It said it lost $2.5 billion in H20 sales in the first quarter and expected to miss $8 billion in the second quarter. Though major cloud companies such as Microsoft and Alphabet have stood their ground on the billions they have earmarked this year for spending on expanding infrastructure for AI data centers, worries about such spending persist amid rapidly changing global trade policies. On an adjusted basis, Nvidia earned 81 cents per share in the first quarter. Analyst estimates varied widely as Wall Street tried to assess the impact of restrictions on some of Nvidia's chip sales to China. Excluding the charges, first-quarter adjusted earnings per share would have been 96 cents. According to data compiled by LSEG, the estimate for the company's adjusted quarterly earnings was 93 cents per share, with 17 analysts providing estimates after April 15 when Nvidia said H20 shipments would require additional licenses. The artificial intelligence market bellwether expects revenue of $45 billion, plus or minus 2%, in the second quarter, compared with analysts' average estimate of $45.90 billion, according to data compiled by LSEG. The forecast includes a loss in H20 revenue of about $8 billion due to the recent export limitations. (Reporting by Arsheeya Bajwa and Stephen Nellis; Editing by Shounak Dasgupta and Matthew Lewis)

Nvidia expects $8 billion hit from US chip rules; forecast misses estimates

(Reuters) -Nvidia beat sales expectations during its fiscal first quarter but forecast second-quarter revenue below market estimates on Wednesday, expecting an $8 billion hit to sales from tighter U.S. curbs on exports of its AI chips to key semiconductor market China. Shares of the world's most valuable semiconductor firm still rose 4% in extended trading. The stock is relatively flat so far this year, compared with 2024 when the shares nearly tripled in value. Nvidia now faces trade restrictions on what it can sell, and the AI data center market is also maturing. Washington's years-long efforts to thwart Beijing's access to top-of-the-line U.S. technology have resulted in stricter restrictions on the export of Nvidia's AI chips - stifling the company's access to one of the largest markets for semiconductors. But Nvidia earlier this month signed a spate of new deals in the Middle East, including the first phases of a 10-square-mile data center site in the United Arab Emirates that could eventually use 5 gigawatts' worth of AI infrastructure. The company has also announced similar deals in Saudi Arabia and Taiwan. "We have a line of sight to projects requiring tens of gigawatts of Nvidia AI infrastructure in the not-too-distant future," Nvidia Chief Financial Officer Colette Kress told analysts on a conference call. But in the shorter term, Nvidia faces restrictions in China, where Kress said its data center revenue declined. New U.S. restrictions on the sale of Nvidia's H20 chips to China, the only AI processors it could legally export to the country, prompted Nvidia to disclose in April that it expected a $5.5 billion charge, while CEO Jensen Huang had in May pegged the revenue impact related to the restrictions at about $15 billion. On Wednesday, Nvidia said the actual first-quarter charge due to the H20 restrictions was $1 billion less than expected because it was able to reuse some materials. It said it lost $2.5 billion in H20 sales in the first quarter and expected to miss $8 billion in the second quarter. However, Nvidia also said the H20 brought in $4.6 billion in sales in the first quarter and that China accounted for 12.5% of overall revenue in the first quarter. Gil Luria, an analyst with D.A. Davidson, said the overall impact of the H20 restrictions was less than feared. "There was a removal of some China revenue from the July quarter guides, but there was also China revenue that was pulled into the first quarter. Chinese buyers were stocking up on H20 ahead of the restrictions, which is what propped up the April quarter," Luria said. Though major cloud companies such as Microsoft and Alphabet have stood their ground on the billions they have earmarked this year for spending on expanding infrastructure for AI data centers, worries about such spending persist amid rapidly changing global trade policies. On an adjusted basis, Nvidia earned 81 cents per share in the first quarter. Analyst estimates varied widely as Wall Street tried to assess the impact of restrictions on some of Nvidia's chip sales to China. Excluding the charges, first-quarter adjusted earnings per share would have been 96 cents. According to data compiled by LSEG, the estimate for the company's adjusted quarterly earnings was 93 cents per share, with 17 analysts providing estimates after April 15 when Nvidia said H20 shipments would require additional licenses. The artificial intelligence market bellwether expects revenue of $45 billion, plus or minus 2%, in the second quarter, compared with analysts' average estimate of $45.90 billion, according to data compiled by LSEG. The forecast includes a loss in H20 revenue of about $8 billion due to the recent export limitations. "The broader concern is that trade tensions and potential tariff impacts on data center expansion could create headwinds for AI chip demand in upcoming quarters," said Emarketer analyst Jacob Bourne. "This doesn't signal an end to Nvidia's dominance, but highlights that sustaining it will require navigating an increasingly complex landscape of geopolitical, competitive, and economic challenges." (Reporting by Arsheeya Bajwa in Bengaluru and Stephen Nellis in San FranciscoEditing by Shounak Dasgupta and Matthew Lewis)

Nvidia shares rise as sales hit from China export curbs not as bad as feared

(Reuters) -Nvidia beat quarterly sales expectations as customers stockpiled its AI chips before fresh U.S. curbs on China exports took effect, but the same restrictions will slice off $8 billion in sales from the company's current quarter, forcing the company to offer a forecast below Wall Street estimates on Wednesday. Shares of the world's most valuable semiconductor firm still rose 5% in extended trading as investors digested news that the hit in the current fiscal second quarter was not as bad as feared, and Nvidia talked up demand for its new Blackwell chips from customers including Microsoft. The stock is relatively flat so far this year, compared with 2024 when the shares nearly tripled in value. Nvidia now faces trade restrictions on what it can sell, and the AI data center market is also maturing. Washington's years-long efforts to thwart Beijing's access to top-of-the-line U.S. technology have resulted in stricter restrictions on the export of Nvidia's AI chips - stifling the company's access to one of the largest markets for semiconductors. Midway through a conference call with analysts, CEO Jensen Huang made impassioned remarks about U.S.-China policy, saying that Nvidia was at risk of being cut off from China's massive AI developer base and arguing that China's chip industry was sophisticated and closing in on the United States' dominance. But he praised U.S. President Donald Trump's recent move to rescind a so-called AI diffusion rule that would have regulated global flows of U.S. AI chips. "President Trump wants America to win. And he also realizes that we're not the only country in the race," Huang said. Huang told analysts that Nvidia's Hopper chips could no longer be modified for the Chinese market but did not comment on its Blackwell chips. Reuters has reported that Nvidia is preparing a Blackwell variant for the Chinese market. Though unlikely to make up for the loss in Chinese revenue, a spate of new deals that Nvidia signed earlier this month in the Middle East could offer fresh avenues of growth - including the first phases of a 10-square-mile data center site in the United Arab Emirates that could eventually use 5 gigawatts' worth of AI infrastructure. The company has also announced similar deals in Saudi Arabia and Taiwan. "We have a line of sight to projects requiring tens of gigawatts of Nvidia AI infrastructure in the not-too-distant future," Nvidia Chief Financial Officer Colette Kress said on the conference call. But in the shorter term, restrictions on China exports will hurt. Kress said data center revenue in that country declined. U.S. restrictions on the sale of Nvidia's H20 chips to China, the only AI processors it could legally export to the country, prompted Nvidia to disclose in April that it expected a $5.5 billion charge, while Huang had in May pegged the revenue impact related to the restrictions at about $15 billion. On Wednesday, Nvidia said the actual first-quarter charge due to the H20 restrictions was $1 billion less than expected because it was able to reuse some materials. It said it lost $2.5 billion in H20 sales in the first quarter and expected to miss $8 billion in the second quarter. However, Nvidia also said the H20 brought in $4.6 billion in sales in the first quarter and that China accounted for 12.5% of overall revenue in the first quarter. Gil Luria, an analyst with D.A. Davidson, said the overall impact of the H20 restrictions was less than feared. "There was a removal of some China revenue from the July quarter guides, but there was also China revenue that was pulled into the first quarter. Chinese buyers were stocking up on H20 ahead of the restrictions, which is what propped up the April quarter," Luria said. Though major cloud companies such as Microsoft and Alphabet have stood their ground on the billions they have earmarked this year for spending on expanding infrastructure for AI data centers, worries about such spending persist amid rapidly changing global trade policies. On an adjusted basis, Nvidia earned 81 cents per share in the first quarter. Analyst estimates varied widely as Wall Street tried to assess the impact of restrictions on some of Nvidia's chip sales to China. Excluding the charges, first-quarter adjusted earnings per share would have been 96 cents. According to data compiled by LSEG, the estimate for the company's adjusted quarterly earnings was 93 cents per share, with 17 analysts providing estimates after April 15 when Nvidia said H20 shipments would require additional licenses. Nvidia's data center segment revenue was $39.1 billion in the first quarter, compared with analyst estimates of $39.3 billion, according to LSEG data. The company said it has $29.8 billion in commitments to have its products manufactured, an increase from the year before but down quarter-over-quarter. Nvidia, a bellwether of the artificial-intelligence market, expects revenue of $45 billion, plus or minus 2%, in the second quarter, compared with analysts' average estimate of $45.90 billion, according to data compiled by LSEG. The forecast includes a loss in H20 revenue of about $8 billion due to the recent export limitations. "The broader concern is that trade tensions and potential tariff impacts on data center expansion could create headwinds for AI chip demand in upcoming quarters," said Emarketer analyst Jacob Bourne. "This doesn't signal an end to Nvidia's dominance, but highlights that sustaining it will require navigating an increasingly complex landscape of geopolitical, competitive, and economic challenges." (Reporting by Arsheeya Bajwa in Bengaluru and Stephen Nellis in San FranciscoWriting by Sayantani GhoshEditing by Shounak Dasgupta and Matthew Lewis)

Nvidia: Q1 EPS up a third

Artificial intelligence (AI) chip giant Nvidia on Wednesday evening reported adjusted (non-GAAP) earnings per share of $0.81 for Q1 2025-26, up 33% y-o-y. Excluding a $4.5bn charge related to US requirements on exports of H20 products to China and the associated tax effects, adjusted EPS would have been $0.96, slightly exceeding analysts' expectations. Also on a year-on-year basis, its non-GAAP gross margin contracted by 17.9 points to 61% (71.3% excluding the H20 charge), but revenue grew by 69% to nearly $44.1bn, also exceeding consensus estimates. "Global demand for Nvidia's AI infrastructure is incredibly strong. AI inference chip generation has increased tenfold in a year, and with the widespread adoption of AI agents, demand for AI computing will accelerate," CEO Jensen Huang said. For Q2, Nvidia anticipates an adjusted gross margin of 72%, plus or minus 50 basis points, and revenue of $45bn, plus or minus 2% (with an impact of $8bn related to export restrictions on H20 products). Copyright (c) 2025 CercleFinance.com. All rights reserved.

Nvidia shares jump after blockbuster earnings report

STORY: Shares of Nvidia jumped more than 6% in Thursday morning trading, a day after the AI bellwether reported a blockbuster 69% surge in quarterly sales. The higher-than-expected sales growth was driven by customers stockpiling AI chips ahead of U.S. export restrictions on China. The company, however, warned that the new curbs - which would stop Nvidia from selling its H20 chip made for the Chinese market - are expected to cut $8 billion from its current-quarter sales. But the hit to chip sales was not as bad as feared, and Nvidia also talked up demand for its new Blackwell chips from customers including Microsoft. That was welcome news to investors, says Morningstar equity strategist Brian Colello. "Investors can breathe a sigh of relief that the China revenue impact is now known a bit better, and it's not as severe. Meanwhile, the Blackwell products and the transition to the newer Blackwell architecture is in full swing, better than anticipated, and there's still plenty of demand in developed markets and elsewhere. So Nvidia is still in a tremendously strong position in AI, in the markets it's allowed to serve. But China, we'll see - again, we're not necessarily betting on a China comeback, but that's pure upside if there is." CEO Jensen Huang, on a conference call with analysts, said Nvidia was at risk of being cut off from China's massive AI developer base and argued that China's chip industry was sophisticated and closing in on the United States. But he praised U.S. President Donald Trump's recent move to rescind a so-called AI diffusion rule that would have regulated the flow of U.S. AI chips around the world. Despite the China export restrictions, Nvidia forecast sales of $45 billion, plus or minus 2%, in the second quarter, only slightly below analysts' average estimate.