Nvidia (NASDAQ: NVDA) shares surged 5% in early Thursday trading after the semiconductor giant reported better-than-expected first-quarter results, buoyed by booming demand for artificial intelligence chips\u2014even as U.S. export restrictions to China dealt a multibillion-dollar blow.<\/p>\n\n\n\n
The rebound marks a sharp reversal from earlier this year, when Nvidia stock was down nearly 30% by April. Thursday\u2019s move brings year-to-date gains to 5%, edging the stock closer to its all-time closing high of $153.13 set on January 7.<\/p>\n\n\n\n
Nvidia\u2019s quarterly reports have become high-stakes events, often producing big stock swings. The last eight quarters have seen shares move an average of 7.4% either way post-earnings, underscoring investor sensitivity to AI-related growth signals and geopolitical risks.<\/p>\n\n\n\n
The biggest headline this quarter came from Nvidia’s China business, where U.S. government restrictions blocked the sale of H20 chips. The company reported a $2.5 billion sales loss from these bans and warned of another $8 billion impact in the second quarter. A $4.5 billion inventory charge related to unsold China-bound chips also weighed on results\u2014but that was $1 billion less than feared.<\/p>\n\n\n\n
Excluding the charge, Nvidia posted adjusted earnings of $0.96 per share, beating analyst expectations of $0.93. Including the China inventory hit, earnings came in at $0.81.<\/p>\n\n\n\n
Despite the geopolitical drag, Nvidia reported record revenue of $44.1 billion, topping estimates of $43.3 billion. Year-over-year revenue growth slowed to 69.1%, down from a staggering 262% a year ago\u2014but still far ahead of most large-cap tech peers.<\/p>\n\n\n\n
Its data center segment\u2014key to powering AI workloads\u2014continued to shine. Sales hit $39.1 billion, driven by major customers like Amazon, Microsoft, and Google. Hyperscalers contributed nearly half of the segment\u2019s revenue.<\/p>\n\n\n\n
\u201cThis was a really strong quarter, all things considered,\u201d said Benchmark Company managing director Cody Acree in a Yahoo Finance interview. \u201cTo weather an $8 billion China hit and still hit key revenue targets is a win.\u201d<\/p>\n\n\n\n
The company\u2019s future remains deeply tied to the AI arms race unfolding across both Big Tech and startups. Nvidia CFO Colette Kress said Microsoft had already deployed “tens of thousands of Blackwell GPUs” and expects to scale that to “hundreds of thousands” of next-gen GB200 chips\u2014many earmarked for OpenAI, Microsoft\u2019s AI research partner.<\/p>\n\n\n\n
CEO Jensen Huang struck a cautious tone on U.S.-China dynamics during the earnings call, acknowledging that China continues advancing its AI capabilities. \u201cChina\u2019s AI moves on with or without U.S. chips,\u201d Huang warned, underscoring the broader strategic risks facing Nvidia in a rapidly evolving global market.<\/p>\n\n\n\n
Still, the message investors heard loudest was Nvidia\u2019s dominance in the AI chip space. As tech giants and startups pour billions into building AI infrastructure, Nvidia remains the central supplier\u2014positioning it to weather geopolitical turbulence and maintain its pivotal role in the next era of computing.<\/p>\n\n\n\n