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Nvidia weathers tariff uncertainty to see surge in revenues | |
(about 2 hours later) | |
Nvidia logo is seen in this illustration taken, January 27, 2025. | Nvidia logo is seen in this illustration taken, January 27, 2025. |
Nvidia reported a huge boost to revenues in the first quarter of the year, with sales of its chips rising more than 69% from a year ago. | |
"Global demand for Nvidia's AI infrastructure is incredibly strong," chief executive, Jensen Huang said in a press release, adding that he expected demand for AI computing to "accelerate". | |
The US company's sophisticated chips have played a central role in equipment made for artificial intelligence (AI) computing. | The US company's sophisticated chips have played a central role in equipment made for artificial intelligence (AI) computing. |
Nvidia was the last major tech firm to report during a strong earnings season for tech companies whose shares have surged in recent weeks. | Nvidia was the last major tech firm to report during a strong earnings season for tech companies whose shares have surged in recent weeks. |
Tech stocks, including Nvidia, had previously plummeted in April amid uncertainty over US President Trump's tariff policies. | Tech stocks, including Nvidia, had previously plummeted in April amid uncertainty over US President Trump's tariff policies. |
In April, Washington restricted the sale of Nvidia's China-specific "H20" chips, which led to a drop in demand. | |
Nvidia said it had incurred a $4.5bn charge as a result. However, Nvidia's initial forecast for the impact on business was significantly higher - at $5.5bn. | |
US plans | |
Changes in global trade policies also loomed large in the company's forecast. | |
New export controls and tariffs have increased the complexity and cost of its supply chain, and may continue to do so, the company said. | New export controls and tariffs have increased the complexity and cost of its supply chain, and may continue to do so, the company said. |
Nvidia said it planned to increase manufacturing in the United States to help tackle the issue. | |
Last week, Mr Huang criticised the US rules blocking exports of advanced computing chips to China. | Last week, Mr Huang criticised the US rules blocking exports of advanced computing chips to China. |
The controls were put in place following concerns that chip technology with potential military uses could be deployed by companies loyal to China's communist party. | The controls were put in place following concerns that chip technology with potential military uses could be deployed by companies loyal to China's communist party. |
Mr Huang blasted the policies as a "failure" and said they were backfiring against American companies. | Mr Huang blasted the policies as a "failure" and said they were backfiring against American companies. |
Meanwhile, the Financial Times reported Wednesday that President Trump was ordering US chip software suppliers to stop selling their products to Chinese chip companies. | Meanwhile, the Financial Times reported Wednesday that President Trump was ordering US chip software suppliers to stop selling their products to Chinese chip companies. |
The move is intended to make it more difficult for China to develop its own advanced chips that would compete with Nvidia's, the paper said. | |
"The China export restrictions underscore the immediate pressure from geopolitical headwinds," according to Emarketer analyst Jacob Bourne. | "The China export restrictions underscore the immediate pressure from geopolitical headwinds," according to Emarketer analyst Jacob Bourne. |
Sustaining its dominant position would require Nvidia to navigate "an increasingly complex landscape of geopolitical, competitive, and economic challenges," he added. | |
At the same time, Nvidia has benefitted from the emergence of new buyers among governments in the Gulf states. | At the same time, Nvidia has benefitted from the emergence of new buyers among governments in the Gulf states. |
Earlier this month, Mr Huang travelled with President Trump to the Middle East where the company said it would sell hundreds of thousands of its AI chips in Saudi Arabia. | Earlier this month, Mr Huang travelled with President Trump to the Middle East where the company said it would sell hundreds of thousands of its AI chips in Saudi Arabia. |
"Countries around the world are recognizing AI as essential infrastructure — just like electricity and the internet — and Nvidia stands at the center of this profound transformation," Mr Huang wrote after the earnings announcement. | |
Sales in Nvidia's key data centre business grew 73% on an annual basis. | Sales in Nvidia's key data centre business grew 73% on an annual basis. |
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