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Nvidia (NVDA), already a number of big tech juggernauts, continues to generate impressive sales growth despite the ban on exporting several products to China. These bans already cost the company billions of dollars to sell, and will cost more in the second quarter. Despite these headwinds, Nvidia delivered a strong first quarter performance.
Sales continued to rise sharply from the previous year, up from $26 billion in the previous year’s quarter to $44.1 billion this year. This is about 69% profit compared to the previous year. It’s a very impressive growth for a company of this size, even if it wasn’t at the fierce level of a few years ago. From late 2023 to early 2024, Nvidia recorded sales growth in several quarters, exceeding 200%.
Management said sales were hampered by the US ban on shipments of high-end H20 chips to China, and sales in the second quarter would also be affected by the ban, affecting sales of up to around $8 billion. However, in a prepared statement, CEO Jensen Huang said, “The global demand for NVIDIA’s AI infrastructure is extremely strong.”
In quarterly total, Nvidia reported revenue of $44.1 billion compared to an estimated $43.3 billion. The figures outperform analysts’ sales, but the company did not meet revenue expectations. Analyst estimates were $0.81 earnings per share compared to $0.93. The H20 chip ban spent an incremental increase on the company of $0.15 earnings per share, and the company received a $4.5 billion bill due to the limit.
Much of the first quarter sales (almost 50%) come from what is called hyperschool. Amazonwith Microsoft alphabetis building a huge data center to power AI applications. Nvidia’s data center business accounts for a large portion of sales, with gaming chips in the second place.
“Nations around the world recognize AI as a critical infrastructure like electricity and the Internet, and Nvidia stands at the heart of this deep transformation,” Huang said.
Hyperscalers are important to Nvidia, but new sources of demand are also emerging. The company will tip to Humain, an AI startup supported by Saudi Arabia’s sovereign wealth fund. The five-year deal marks the country’s AI map, which will drive Nvidia’s billions of dollars sales.
This announcement will help alleviate the troublesome concerns of investors especially concerned about the sustainability of NVIDIA sales. Trump administration tariffs Nvidia’s powerful chips are prohibited in trade. These concerns hurt Nvidia’s stock at the beginning of the year.
Investors are also worried that efficient AI models such as China’s Deepseek will reduce Nvidia’s strong chip demand. In response to the debut of Deepseek and other Chinese AI models, the Trump administration has implemented strict restrictions by exporting Nvidia’s H20 chips to China.
The ban is expected to reach $8 billion in the second quarter. If the company’s latest quarterly sales are just as low as $40 billion, that’s not a minor impact. However, Nvidia is working on a revised version of its H20 chip to meet the requirements of the Trump administration, according to Reuters.
Nvidia Stock Outlook for 2025
The development of efficient AI models like Deepseek has worried investors early in the year, and Trump’s tariff tantrums rattled the market, but stocks have messed up those concerns for now. The stock was on the day after its first quarter report, but it fell below its 52-week high of over $153 per share.
If anything, the Trump administration’s ban on several Nvidia chips shows how much unmet demand remains. Without export restrictions, sales would have been much higher. So, if Nvidia can make further changes to meet compliance, sales will be upside down some, and more growth in the last quarter.
“China will remain the biggest overhang of Nvidia stock until it gets a solution from the Trump administration,” said Da Davison analyst Gil Luria. “It is emphasized that if the company has a significant negative impact on (their) business in the future and is unable to sell at all to the Chinese market, it will experience “a major negative impact on (their) business in the future” even beyond the impact of the outline this quarter and the next H20 Vans. ”
Meanwhile, rivals such as Intel are older guards. Scramble to catch up in the AI chip worldMeanwhile, nvidia remains the beat name.
So, with what appears to be an infinite demand for topline chips, Nvidia appears to be in a position to continue its control if the economy is on track. That’s good for Nvidia investors.
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