Nvidia's Income Soars to a New Peak, Yet Profit Margins Strain Due to Sales Limitations in China
Nvidia (NVDA) surpassed analyst expectations in its first-quarter earnings report, posting a record-high revenue of $44.06 billion, but with earnings slightly missing the mark. The boost in revenue, up 69% year-over-year, was driven by a 73% growth in sales from the data center segment, accounting for $39.1 billion of the total revenue.
In a statement, CEO Jensen Huang remarked, "Global demand for NVIDIA's AI infrastructure is incredibly robust," attributing the ongoing surge in AI inference token generation to the demand for AI computing that is anticipated to accelerate as AI agents become mainstream.
However, Nvidia took a hit of $4.5 billion due to new export curbs on the sale of its H20 chips to China. In the previous month, the company had anticipated a $5.5 billion charge. Without these costs, Nvidia would have reported earnings per share (EPS) of 96 cents, surpassing analyst estimates.
For the current quarter, Nvidia anticipates an $8 billion loss due to lost revenue from H20 sales. The company predicts quarterly revenue of $45 billion, plus or minus 2%, and slightly below Street expectations.
Following the results, Nvidia shares surged over 5% to just above $141 in after-hours trading, reaching their highest level since February. If sustained, Nvidia could overtake Microsoft (MSFT) as the world's most valuable company by market capitalization.
In the latest updates, Nvidia's market cap exceeded $3.48 trillion overnight, briefly surpassing Microsoft's $3.44 trillion after a surge driven by strong quarterly performance and investor enthusiasm around its AI-related growth. This notable shift marks the first time since mid-2024 that Nvidia has claimed the title of the world's most valuable public company.
Without additional context or background information, these updated market cap figures have been integrated to provide a broader perspective on the financial impact of Nvidia's strong earnings performance.
- The rise in Nvidia's market cap to over $3.48 trillion can be attributed to strong quarterly performance and investor enthusiasm around its AI-related growth, signifying a shift towards technology-driven finance.
- Nvidia's CEO, Jensen Huang, hinted at the robust global demand for NVIDIA's AI infrastructure, linking it to the growth in AI inference token generation, a clear indication of the expanding AI finance market.
- In the midst of strong earnings, Nvidia's market cap briefly surpassed Microsoft's, placing it as the world's most valuable company by market capitalization. This indicates a potential shift in the tech finance market, with Nvidia leading the way in AI-based trading and investing.
