Nvidia has reported first-quarter earnings that surpassed market expectations, further cementing its leadership in the AI chip industry despite significant challenges stemming from trade restrictions with China.
Following the results, Nvidia’s shares surged as much as 6.4% before eventually settling 3.25% higher, adding more than $200 billion to its market value and reflecting strong investor confidence in the company’s growth prospects.
For the quarter ending April 27, Nvidia posted revenue of $44.06 billion, marking a remarkable 69% year-on-year increase and beating the consensus estimate of $43.29 billion. Adjusted earnings per share came in at 96 cents, outperforming the expected 93 cents. The data centre division, which represents the bulk of Nvidia’s revenue and is critical to its AI business, generated $39.1 billion in sales—slightly below the forecast of $39.22 billion. Meanwhile, other segments such as gaming and networking provided positive surprises. Gaming revenue reached $3.76 billion, significantly higher than the predicted $2.85 billion, and networking sales jumped 56% year-on-year to $4.96 billion, well ahead of estimates. This diversity of revenue streams highlights Nvidia’s expanding footprint beyond its traditional markets.
Looking ahead, Nvidia offered a positive outlook for the second quarter, forecasting revenue between $44.1 billion and $45.9 billion, in line with analyst expectations. However, the company cautioned that US export restrictions on its H20 chips to China will result in approximately $8 billion in lost sales during the quarter. Despite this headwind, Nvidia’s leadership expressed optimism about the demand for its latest Blackwell AI chips, now in full-scale production. The ramp-up of these next-generation semiconductors is expected to fuel growth and largely compensate for the revenue shortfall caused by the China export ban.
CEO Jensen Huang emphasised Nvidia’s pivotal role in the ongoing AI revolution, describing the company’s expansion into offering complete AI systems, rather than just chips, as essential for meeting accelerating global demand. He also called for regulatory relief to enable the company to resume chip sales to China, warning that losing access to this critical market would ultimately advantage competitors and challenge Nvidia’s global AI leadership.
Adjusted gross margins were slightly pressured by the $4.5 billion writedown related to H20 inventory, coming in at 71.3%, just above estimates but down from 78.9% a year ago. Research and development expenses increased by 47% to nearly $4 billion, reflecting Nvidia’s heavy investment in innovation and new technology development.
Nvidia’s earnings underscore the resilience and strength of its AI infrastructure business despite geopolitical challenges. The company’s successful production scale-up of Blackwell chips and continued demand outside China position it well for sustained growth as AI technology becomes increasingly central to industries worldwide.
