Nvidia surpassed Wall Street’s projections in its quarterly revenue report on Wednesday, continuing a streak of financial successes for the technology leader. For the quarter ending in April, revenue reached $44.1 billion, a 69% increase from the previous year.
The company outperformed an investor forecast of $43.3 billion. Adjusted earnings per share were reported at $0.81, falling short of the anticipated 88 cents. Additionally, data center revenue soared to $39.1 billion, marking a 73% growth year-over-year.
Nvidia remains optimistic about the AI sector, both in terms of its advanced hardware and the regulatory challenges on the horizon, which investors are keenly monitoring.
“Nvidia has once again surpassed expectations, but maintaining this lead is growing more challenging,” observed Jacob Bourne, an analyst at Emarketer. “China’s export restrictions highlight immediate geopolitical pressures, but Nvidia also faces competition as rivals like AMD strengthen their positions based on certain cost-effectiveness metrics in AI workloads.”
CEO Jensen Huang stated, “The global demand for Nvidia’s AI infrastructure is remarkably strong. Countries worldwide see AI as a vital utility, comparable to electricity and the Internet.”
The chipmaker anticipates revenues of $45 billion for the second quarter of 2026.
Nvidia’s quarterly reports over the past year reflect explosive growth. However, the company is under increasing pressure from U.S. regulations.
Donald Trump’s announcement in April regarding tightened computer chip export regulations effectively barred Nvidia from selling its primary revenue source, the H20 AI chip, to China.
“H20 products were primarily designed for the Chinese market,” the company’s first quarter revenue report stated. Consequently, Nvidia expects to miss out on $8 billion in revenue for its second quarter.
Despite this setback, Huang expressed optimism about Trump’s intentions to allow companies to export chips with limited capabilities to China.
“The president has a plan and a vision. I trust him,” he noted.
However, Huang cautioned that losing access to China’s potential $50 billion AI market could jeopardize U.S. leadership in the global AI infrastructure race. “China is one of the largest AI markets, serving as a launchpad for global success,” he stated during the revenue call.
“China’s AI will progress with or without U.S. chips,” he remarked. “The issue isn’t whether China has AI—it’s already happening; the real question is if one of the world’s largest AI markets will rely on American chips.”
The company revealed that the recent SEC claims could cost them $5.5 billion. They noted only $4.6 billion in claims in the first quarter tied to H20 excess inventory and purchase obligations. Some materials may also be reused, affecting forecasts.
In an interview with Ben Thompson, Huang described the loss as “deeply painful.” Reports suggest a revenue loss of $15 billion. In the first quarter alone, the company could not ship an additional $2.5 billion in H20 revenue.
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“We have never written off so much inventory in history,” Huang remarked. “We’re not just losing $5.5 billion; we’ve also missed out on $15 billion in sales… and potentially… $3 billion in taxes.”
The tightened export regulations pose challenges: a committee within the U.S. Congress indicated that Nvidia is seeking feedback on China’s groundbreaking AI model, especially regarding Deepseek, an AI firm that mirrors products from U.S. AI companies without the same computational power.
The committee’s report alleges that Deepseek “secretly leaked American user data to the Chinese Communist Party, manipulated information to align with CCP propaganda, and trained on materials unlawfully acquired from the company.”
Despite the tightening export restrictions, analysts believe Nvidia has shown remarkable resilience this quarter.
“Amid industry integration and rising competition, geopolitical tensions have created a tougher business landscape. Nevertheless, the company has effectively focused on its operational core,” Investing.com commented.
“We’ve effectively managed supply and demand dynamics within data centers. Thus, the $4.5 billion impact from H20 during the quarter underscores NVIDIA’s ability to adapt to market changes,” they added.
Analysts also speculate that U.S.-China negotiations “might yield positive outcomes for Nvidia,” according to Wedbush analyst Dan Ives.
“Nvidia is the sole chipmaker propelling the AI revolution. This narrative is underscored by their results and Jensen’s optimistic remarks,” Ives stated. “This indicates a significant lead in the broader tech landscape, suggesting the AI revolution is poised for further growth, despite the tariff challenges posed by Trump.”
Though Nvidia’s Chinese operations remain uncertain, analysts note a surge in demand for Nvidia chips in Saudi Arabia and the UAE. The company has benefited from AI opportunities arising from Trump’s visit, which secured $600 million for U.S. businesses.
Nvidia announced plans to sell hundreds of thousands of AI chips to Saudi Arabia, including to a startup supported by the nation’s sovereign wealth fund, employing 18,000 individuals with the latest technology.
Source: www.theguardian.com
