Nvidia Overcomes Tariff-Driven Turbulence to Deliver Q1 Results That Eclipsed Projections
AP file photo
People take a look to Nvidia's new products during the Computex 2025 exhibition in Taipei, Taiwan, Wednesday, May 21, 2025.
SAN FRANCISCO (AP) — 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.
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 U.S. 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.
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 U.S. 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 U.S. will eventually regret.
'The U.S. 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 Jan. 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.
The outlook began brightening for Nvidia last month after AI leaders such as Microsoft, Alphabet and Meta Platforms reaffirmed their plans to invest heavily in AI. That spending has been a boon for Nvidia because its chipsets provide the technology's brainpower, an advantage that has helped the company's annual revenue from $27 billion to $130 billion in just two years.
Wedbush Securities analyst Dan Ives estimates Big Tech companies will spend about $325 billion on long-term investments primarily revolving around AI this year, with a substantial chunk of that money budgeted for Nvidia's chips 'There is one chip in the world fueling the AI revolution and it's Nvidia. That narrative is clear from these results,' Ives wrote in a research note.
Trump's trade war has been raising doubts about Nvidia's ability to maintain its astounding momentum by threatening to close off other key markets besides China.
In apparent attempt to curry favor with the president, Huang last month announced Nvidia will help boost U.S. manufacturing by building some of its AI chips and supercomputers in plants located in Arizona and Texas. Huang also accompanied Trump on a trip to Saudi Arabia earlier this month, signaling Nvidia's ambitions to sell more of its AI chips in the Middle East as that region attempts to lessen its economy dependence on oil.
Trump also extended a helping hand to Nvidia of by rescinding the scheduled start export controls that had been drawn up under President Joe Biden's administration that would have broadened the restrictions on chips sales in foreign markets beyond the limits already in place on deals with China and Russia.
'The U.S. will always be Nvidia's largest market and home to the largest installed base of our infrastructure,' Huang said. 'Every nation now sees AI as core to the next industrial revolution.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Kyodo News
an hour ago
- Kyodo News
Japan tariff negotiator in Washington holds talks twice with Lutnick
KYODO NEWS - 7 hours ago - 12:39 | All, Japan, World Japan's top tariff negotiator, Ryosei Akazawa, spoke with U.S. Commerce Secretary Howard Lutnick by phone twice on Saturday, an official said, as they try to iron out some of the most difficult issues in pursuit of a deal that will be beneficial to both countries. Akazawa, who has extended his stay in Washington, spoke to Lutnick for about 15 minutes in the morning and about 20 minutes in the evening, the Japanese government said, adding Tokyo will continue to work "strenuously" with Washington toward an agreement. Akazawa's calls with Lutnick came a day after they held a meeting that lasted about an hour, with sharp differences apparently remaining over U.S. President Donald Trump's hefty tariffs on foreign-made cars and auto parts. In the ongoing negotiations, Japan has placed top priority on mitigating the impact of the Trump administration's increase in April of the tariff on imported automobiles to 27.5 percent from 2.5 percent. Trump and his trade team have shown no signs of scrapping or lowering such sector-based tariffs, including on steel and aluminum, that the president has imposed on national security grounds. Akazawa arrived in Washington on Thursday for his seventh round of ministerial meetings on tariffs with U.S. Cabinet members. Akazawa, Japan's minister for economic revitalization, was initially due to leave for Tokyo on Saturday, but he extended his visit to explore a separate meeting with U.S. Treasury Secretary Scott Bessent. The official said it remains unclear how long Akazawa will stay in the U.S. capital. Related coverage: Japan wrestling with U.S. tariff talks as July deadline looms Trump could extend 90-day tariff pause in July, White House says Japan reiterates that higher U.S. auto tariffs are unacceptable
The Mainichi
5 hours ago
- The Mainichi
Senators voting in weekend session to meet Trump's deadline for passing his tax and spending cuts
WASHINGTON (AP) -- The Senate is taking a key procedural vote that has dragged on for more than two hours during a rare Saturday evening session as Republicans struggled to advance President Donald Trump's package of tax breaks, spending cuts and bolstered deportation funds by his July Fourth deadline. The proceedings came to a standstill and Vice President JD Vance arrived at the Capitol to break a potential tie. Tense scenes were playing out in the chamber as senators huddled in negotiations. Several Republican senators were registering their opposition to proceeding to open debate on the bill. Republicans are using their majorities in Congress to push aside Democratic opposition, but they have run into a series of political and policy setbacks. Not all GOP lawmakers are on board with proposals to reduce spending on Medicaid, food stamps and other programs as a way to help cover the cost of extending some $3.8 trillion in Trump tax breaks. "It's time to get this legislation across the finish line," said Senate Majority Leader John Thune, R-S.D., as the session was underway. Ahead of the expected roll call, the White House released a statement of administrative policy saying it "strongly supports passage" of the bill that "implements critical aspects" of the president's agenda. Trump himself was at his golf course in Virginia on Saturday with GOP senators posting about it on social media. But as the day stalled, billionaire Elon Musk lashed out, calling the package "utterly insane and destructive." "The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country!" the former top Trump aide said in a post. The 940-page bill was released shortly before midnight Friday, and senators are expected to grind through the days ahead with all-night debate and amendments. If the Senate is able to pass the bill, it would need to return to the House for a final round of votes before it could reach the White House. With the narrow Republican majorities in the House and Senate, leaders need almost every lawmaker on board in the face of essentially unified opposition from Democrats. Senate Democratic leader Chuck Schumer of New York said Republicans dropped the bill "in the dead of night" and are rushing to finish the bill before the public fully knows what's in it. He is expected to call for a full reading of the text in the Senate, which would take hours. Make-or-break moment for GOP The weekend session could be a make-or-break moment for Trump's party, which has invested much of its political capital on his signature domestic policy plan. Trump is pushing Congress to wrap it up, even as he sometimes gives mixed signals, allowing for more time. At recent events at the White House, including Friday, Trump has admonished the "grandstanders" among GOP holdouts to fall in line. The legislation is an ambitious but complicated series of GOP priorities. At its core, it would make permanent many of the tax breaks from Trump's first term that would otherwise expire by year's end if Congress fails to act, resulting in a potential tax increase on Americans. The bill would add new breaks, including no taxes on tips, and commit $350 billion to national security, including for Trump's mass deportation agenda. But the cutbacks to Medicaid, food stamps and green energy investments, which a top Democrat, Sen. Ron Wyden of Oregon said would be a "death sentence" for America's wind and solar industries, are also causing dissent within GOP ranks. The Republicans are relying on the reductions to offset the lost tax revenues but some lawmakers say the cuts go too far, particularly for people receiving health care through Medicaid. Meanwhile, conservatives, worried about the nation's debt, are pushing for steeper cuts. Sen. Thom Tillis, R-N.C., who said he spoke with Trump late Friday explaining his concerns, announced Saturday he cannot support the package as is, largely because of the changes to health care that he said would force his state to "make painful decisions like eliminating Medicaid coverage for hundreds of thousands." Sen. Rand Paul of Kentucky has been opposed to the bill's provision to raise the nation's debt limit by $5 trillion. And GOP Sen. Tim Sheehy of Montana said he would agree to proceeding only after being assured a provision for public lands sales he opposes would be taken out with an amendment. After setbacks, Republicans revise some proposals The release of that draft had been delayed as the Senate parliamentarian reviewed the bill to ensure it complied with the chamber's strict "Byrd Rule," named for the late Sen. Robert C. Byrd, It largely bars policy matters from inclusion in budget bills unless a provision can get 60 votes to overcome objections. That would be a tall order in a Senate with a 53-47 GOP edge and Democrats unified against Trump's bill. Republicans suffered a series of setbacks after several proposals, including shifting food stamp costs from the federal government to the states or gutting the funding structure of the Consumer Financial Protection Bureau, were deemed out of compliance with the rules. But over the past days, Republicans have quickly revised those proposals and reinstated them. The final text includes a proposal for cuts to the Medicaid provider tax that had run into parliamentary hurdles and objections from several senators worried about the fate of rural hospitals. The new version extends the start date for those cuts and establishes a $25 billion fund to aid rural hospitals and providers. The nonpartisan Congressional Budget Office has said that under the House-passed version of the bill, some 10.9 million more people would go without health care and at least 3 million fewer would qualify for food aid. The CBO has not yet publicly assessed the Senate draft, which proposes steeper reductions. Top income-earners would see about a $12,000 tax cut under the House bill, while the package would cost the poorest Americans $1,600, the CBO said. SALT dispute shakes things up The Senate included a compromise over the so-called SALT provision, a deduction for state and local taxes that has been a top priority of lawmakers from New York and other high-tax states, but the issue remains unsettled. The current SALT cap is $10,000 a year, and a handful of Republicans wanted to boost it to $40,000 a year. The final draft includes a $40,000 cap, but limits it for five years. Many Republican senators say that is still too generous. At least one House GOP holdout, Rep. Nick LaLota of New York, had said that would be insufficient. Trump's deadline nears House Speaker Mike Johnson, who sent his colleagues home for the weekend with plans to be on call to return to Washington. But as the Senate draft was revealed, House GOP support was uncertain. One Republican, Rep. David Valadao of California, said he was opposed.
Kyodo News
7 hours ago
- Kyodo News
Japan tariff negotiator in Washington holds talks twice with Lutnick
KYODO NEWS - 1 hour ago - 12:39 | All, Japan, World Japan's top tariff negotiator, Ryosei Akazawa, spoke with U.S. Commerce Secretary Howard Lutnick by phone twice on Saturday, an official said, as they try to iron out some of the most difficult issues in pursuit of a deal that will be beneficial to both countries. Akazawa, who has extended his stay in Washington, spoke to Lutnick for about 15 minutes in the morning and about 20 minutes in the evening, the Japanese government said, adding Tokyo will continue to work "strenuously" with Washington toward an agreement. Akazawa's calls with Lutnick came a day after they held a meeting that lasted about an hour, with sharp differences apparently remaining over U.S. President Donald Trump's hefty tariffs on foreign-made cars and auto parts. In the ongoing negotiations, Japan has placed top priority on mitigating the impact of the Trump administration's increase in April of the tariff on imported automobiles to 27.5 percent from 2.5 percent. Trump and his trade team have shown no signs of scrapping or lowering such sector-based tariffs, including on steel and aluminum, that the president has imposed on national security grounds. Akazawa arrived in Washington on Thursday for his seventh round of ministerial meetings on tariffs with U.S. Cabinet members. Akazawa, Japan's minister for economic revitalization, was initially due to leave for Tokyo on Saturday, but he extended his visit to explore a separate meeting with U.S. Treasury Secretary Scott Bessent. The official said it remains unclear how long Akazawa will stay in the U.S. capital. Related coverage: Japan wrestling with U.S. tariff talks as July deadline looms Trump could extend 90-day tariff pause in July, White House says Japan reiterates that higher U.S. auto tariffs are unacceptable
