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:

Learn with AIFact CheckingText to SpeechAI Summary

Related Articles

Yomiuri Shimbun

3 hours ago

• Yomiuri Shimbun

Singapore Diplomat Bilahari Kausikan Says U.S. Has Long-term Competitive Strategy with China

Bilahari Kausikan, former permanent secretary of the Singapore Ministry of Foreign Affairs, told The Yomiuri Shimbun that the United States' tariff policy is part of a long-term competitive strategy against China, and Washington will continue to have the same policy even after the president changes. The following text, excerpted from his interview, has been edited for flow and you look at various things that [U.S. President Donald] Trump and other members said, Trump seemed to think of [the] tariff as a kind of universal tool. He tried to do several things at the same time. He tried to use the tariff as a tool for national security goals to stop drugs and migrants, to reduce the deficit, bring back manufacturing to the U.S., increase revenue. I personally don't think this policy is sustainable in the long run. The 90-day timeline is running out soon. I won't be surprised if he extended it — in individual cases. I guess they will extend the timeline for major countries like the U.K., Japan, India and China. [The U.S. tariff policy] will slow down the U.S. economy, increase inflation and it will hurt Trump's own base. I think [the tariffs are] dangerous for all of us, at least most of us. But the real danger I think is for low-income countries, and middle-income countries. For example, how did Japan, South Korea and Singapore become high-income countries? The growth path was the normal one — by exports. It is going to become much more difficult for Vietnam, Indonesia, Thailand and Malaysia. In fact, it will even become much more difficult for some parts of China. So, I think that's the big danger. Because when you get countries stuck in a real income trap, they will get frustrated. When they get frustrated, there will be a kind of geopolitical problem. The competition between major powers is quite natural. You can see trade policies in the context of broader strategic competition. Why does he [Trump] want to bring manufacturing back to the U.S.? I think these are all preparations for long-term strategy competition with China. Trade is just one instrument. That is why there is really no difference in this trade policy. There is very little difference anyway between Biden and Trump. I don't know who is going to succeed Trump. Whoever it is, more or less should have the same policy because this strategic competition with China is a long-term thing. He's also concerned about transshipment from China, to Southeast Asia to the U.S. That is going to be a big problem for countries like Vietnam, Thailand and Malaysia. It's not just a simple method of smuggling or backdooring. There are legitimate reasons why Chinese companies are moving to Southeast Asia. It is not all because of tariffs placed on China or geopolitical tensions. China is becoming a more expensive place to produce for many industries. Some Chinese industries are worried about their own government, so they are trying to move their own business out. Those are very legitimate things, and it is going to be not so straightforward for Southeast Asian countries to deal with it. The U.S. is still a very important market. There is no substitute for the U.S., for anybody. So, every country will make its own calculations — balance or benefit against cost. I don't think we should stop trying to attract Chinese investments or any kind of investment, but we have to be more careful about what kinds of things we work on with China. Economic integration is politically difficult for any country in any region. If you are in a period of slow growth, it is going to become even more politically difficult. And the hard fact is, while we have plans for economic integration, 10 ASEAN (Association of Southeast Asian Nations) economies are competitive. Some leaders think that they are competitive. We need the integration, but whether we will get it is another matter. You have to make yourself an attractive place for people to want to invest in your country. I think some Asian countries have not done enough to keep themselves attractive. We hope you will continue to invest in ASEAN. Japan is one of the most important partners for all ASEAN countries. And you will continue to be so. We hope you will not lose faith in Southeast Asia and continue to invest here. On the other hand, I think Southeast Asian countries must do what they can to make themselves attractive for Japanese investments. The responsibility is ours. — This interview was conducted by Yomiuri Shimbun Correspondent Takashi Itoda. Bilahari Kausikan Kausikan, 71, joined the Singapore Ministry of Foreign Affairs in 1981. He has held posts such as ambassador to the United Nations and assistant secretary for Southeast Asian affairs. He served as permanent secretary of the Ministry of Foreign Affairs from 2010 to 2013. Since retiring, he has spoken actively about the future of ASEAN and is known as a leading voice in Southeast Asia.

Kyodo News

8 hours ago

• Kyodo News

U.S. asked Japan to raise defense spending to 3.5% of GDP

KYODO NEWS - 8 minutes ago - 20:15 | All, Japan, World U.S. President Donald Trump's administration has asked Japan to raise its defense spending to 3.5 percent of gross domestic product, a request that will likely prompt Tokyo to call off a planned high-level meeting with Washington, a Japan-U.S. diplomatic source said Saturday. The request was made recently by Elbridge Colby, U.S. undersecretary of defense for policy, the Financial Times has reported, citing people familiar with the matter. Colby, a seasoned strategist, had previously pressed Japan to increase its defense spending to 3 percent of its GDP. The increased demand will likely lead Japan to cancel a planned meeting of the countries' foreign and defense chiefs, which was scheduled in Washington before Japan's House of Councillors election, expected on July 20. The meeting would have been the first since Japanese Prime Minister Shigeru Ishiba and Trump took office in October and January, respectively. Kyodo News reported in late May that Japan and the United States were considering holding the so-called two-plus-two security talks in Washington this summer. Japan and the United States had not formally said such talks, as held in July last year in Tokyo, would take place. In 2022, after Trump's first term, Japan decided to double its annual defense budget to 2 percent of GDP by 2027, a dramatic move in postwar security policy under the country's war-renouncing Constitution. But Trump continues to complain that the U.S.-Japan security treaty is one-sided, with his administration apparently planning to ask Tokyo to pay more for American troops based in the Japanese archipelago once bilateral negotiations over his tariffs proceed.

Nikkei Asia

16 hours ago

• Nikkei Asia

Mitsubishi Corp. bets big on US solar with $3.9bn expansion plan

Energy Trump tariff pressure spurs shift to US made solar components With vast tracts of land, the U.S. provides abundant opportunities for solar power development. SHIN WATANABE TOKYO -- Japanese trading house Mitsubishi Corp. will boost its solar power generation capacity in the U.S. by 160% by 2028, Nikkei has learned, with a total project cost estimated at $3.9 billion. The company will source equipment from local suppliers and take advantage of tax incentives for solar development in the U.S.