By MICHAEL LIEDTKE, Associated Press
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.
“Global demand for NVIDIA’s AI infrastructure is incredibly strong,” Nvidia CEO Jensen Huang said.
The performance bolstered Nvidia’s shares, which 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 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.
Trump’s trade war has been raising doubts about Nvidia’s ability to maintain its astounding momentum by threatening to close off key market, especially 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.
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