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, AP reports.
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 US 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.
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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.
In a conference call with analysts, Nvidia CEO Jensen Huang lamented that the US government had effectively blocked off AI chip sales to China — a market that he estimated at $50 billion.
Huang warned the export controls have spurred China to build more of its own chips in a shift that he predicted the US will eventually regret.
“The US 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.
Despite Nvidia's lost opportunities in China, investors were heartened by the company's first-quarter performance. Nvidia's shares 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 January 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.