Nvidia Overcomes Tariff Headwinds To Post Stellar Q1 Results, Beating Expectations

Last Updated:May 29, 2025, 09:43 IST

NVIDIA Q1 Earnings 2025: Nvidia has once again delivered standout results, overcoming tariff-related headwinds to post a blockbuster first quarter

Nvidia (NVDA) Q1 Results 2025: Artificial intelligence powerhouse Nvidia has once again delivered standout results, overcoming tariff-related headwinds to post a blockbuster first quarter, powered by surging demand for its cutting-edge chips. The February–April earnings report, released Wednesday, underscored Nvidia’s central role in the AI revolution, even as U.S. trade policies complicated its path.

The strong showing came amid the backdrop of former President Donald Trump’s fluctuating trade war and the imposition of reciprocal tariffs that rattled tech markets. Nvidia, like many tech giants riding the AI wave, had seen its market value take a hit in the lead-up to earnings season as investors worried over the fallout of ongoing export restrictions.

However, recent weeks have seen those concerns ease, with Big Tech broadly beating expectations, and Nvidia capping off the trend. For the quarter, Nvidia reported a net income of $18.8 billion, or $0.76 per share, up 26% year-on-year. Revenue surged 69% to $44.1 billion. Excluding a $4.5 billion charge related to U.S. export controls on AI chip sales to China, adjusted earnings came in at $0.96 per share, well above the $0.73 analysts had forecast.

Looking ahead, Nvidia projected second-quarter revenue of around $45 billion, in line with market expectations. That outlook includes an estimated $8 billion hit from reduced China sales, substantially higher than the $2.5 billion impact in Q1, underscoring the ongoing cost of geopolitical tensions.

In a call with analysts, CEO Jensen Huang voiced concern over U.S. export curbs, warning that blocking chip sales to China—a $50 billion market—may backfire. “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, noting that China is now accelerating domestic chip development.

Still, Nvidia’s robust performance lifted investor sentiment. Its shares jumped over 4% in after-hours trading, recovering from a sharp drop last month that temporarily erased $1.2 trillion in market cap. The stock closed Wednesday at $134.81, just below its level before Trump’s January inauguration.

Nvidia’s outlook is buoyed by continued strong demand from AI leaders like Microsoft, Alphabet, and Meta, who are plowing billions into infrastructure. Wedbush Securities analyst Dan Ives estimates Big Tech will spend $325 billion on AI-related investments this year, much of it directed toward Nvidia’s chips. “There is one chip in the world fueling the AI revolution, and it’s Nvidia,” Ives wrote.

To hedge against future trade risks and align with U.S. interests, Nvidia has pledged to increase domestic manufacturing, with plans to produce AI chips and supercomputers in Arizona and Texas. Huang also accompanied Trump on a recent trip to Saudi Arabia, signaling Nvidia’s broader push into the Middle East as the region diversifies beyond oil.

In a further boost, Trump recently reversed planned export restrictions set during the Biden administration that would have tightened global chip sales beyond China and Russia. “The U.S. will always be Nvidia’s largest market and home to the largest installed base of our infrastructure,” Huang affirmed. “Every nation now sees AI as core to the next industrial revolution.”

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