Nvidia sees revenue top $44bn despite sales limits to China
Nvidia shares rose 6 per cent in after hours trading after the chipmaker and artificial intelligence bellwether unveiled another quarter of strong growth despite tariff-driven turbulence.
Trump's stop-start trade tariff saga has whipsawed Nvidia and other Big Tech firms riding AI mania to propel their revenue and stock prices upward.
Ahead of its earnings announcement on Wednesday, Nvidia's share price was where it was at the beginning of 2025, before Trump took office and started making announcements about tariffs.
Nvidia raked in nearly $44.1billion in revenue during its first quarter, representing a 69 per cent increase year-on-year.
However, revenue levels fell slightly short market expectations amid the Trump administration's quest to tighten its grip on tech exports to China.
The company conceded it took a $45billion write-down on unsold chips intended for the Chinese market, causing it to miss out on approximately $2.5billion worth of additional sales.
Nvidia said that restrictions on the use of open-source AI models from China such as DeepSeek and Qwen could hurt its business, as could US rules barring connected vehicle technology from China, where Nvidia's long-struggling car chip business has finally blossomed.
Total net income for the quarter reached £18.7billion, up 26 per cent, while adjusted gross margins came in at 71.3 per cent before China-related charges.
Nvidia expects US export controls to shave off around $8billion from its current quarter's top line.
Chief executive Jensen Huang remained upbeat, stating: 'Global demand for Nvidia's AI infrastructure is incredibly strong .' Huang said the company's flagship 'backwell' system was enjoying particularly strong sales.
During a phone call with US analysts, Huang praised Trump's decision to rescind an export rule put in place by Joe Biden that would have regulated the flow of Nvidia's chips around the world.
However, the company's quarterly filing noted that no new rule had been issued in its place and that a 'replacement rule may impose new restrictions on our products or operations.'
Huang criticised certain new export curbs imposed by the Trump administration in April. The curbs prevent the company from selling its H20 chip made for the Chinese market, which Huang called 'a springboard to global success.'
However, Huang praised some of Trump's action. He said: 'President Trump wants US tech to lead. The deals he announced are wins for America, creating jobs, advancing infrastructure, generating tax revenue and reducing the US trade deficit.'
In its latest results, the group's data centre arm, which is the engine of its AI drive, delivered $39.1billion in revenue for the quarter, up 73 per cent year-on-year. The firm's data centre division comprises 88 per cent its total turnover.
Nvidia's networking arm, a key part of its AI push, raked in $5billion, while sales in the group's gaming arm rose 42 per cent to $3.8billion.
Josh Gilbert, a market analyst at eToro, said: 'In a quarter of uncertainty, Nvidia has reminded markets why it is the cornerstone of the AI revolution with another solid result and upbeat forecast.
'Investors came into this quarter looking for signs that Nvidia could alleviate short-term concerns.
'What they got was a clear message that demand remains robust, Blackwell is ramping up fast and these results will restore investor confidence.
'Despite the China drag, Nvidia's top-line strength speaks for itself with $44billion in Q1 sales and another $45 billion expected next quarter tells us they're making up for the China loss elsewhere.'
Garry White, chief investment commentator at Charles Stanley, said: 'Artificial intelligence titan Nvidia appears to be absorbing the shock of Donald Trump's investment restrictions on China – to an extent.
'Management provided second-quarter guidance that was a little shy of market expectations – with the revenue loss from Washington's ban on its H20 chips to China expected to be as high as $8billion in the quarter.
'Clearly, the company faces a period of elevated political risk. Nevertheless, the results also showed that the long-term investment case in AI remains intact. Tech bros can relax.'
A US federal court has now blocked Trump's sweeping global trade tariffs, in a major blow to a key component of his economic policies.
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