[SAN FRANCISCO] Nvidia, the world’s most valuable chipmaker, gave an upbeat revenue forecast for the current period, even as a slowdown in China weighed on results.
Sales will be about US$45 billion in the second fiscal quarter, which runs to July, the company said on Wednesday (May 28). That included the loss of roughly US$8 billion in revenue from China because of export controls. The forecast was in line with analysts’ estimates, according to data compiled by Bloomberg.
Nvidia shares rose about 4 per cent in extended trading following the announcement.
The outlook shows that Nvidia is ramping up production of Blackwell, its latest semiconductor design. The chipmaker – now the world’s largest by revenue – dominates the market for artificial intelligence (AI) accelerators, the components that help develop and run AI models. And an ever-broader lineup of hardware and software is letting Nvidia sell more products to customers.
As part of that push, the company is increasingly offering its chips as part of whole computer systems – a move it says is necessary to speed up the deployment of more complex and powerful technology. Nvidia expects AI infrastructure to eventually transform much of the economy, part of what chief executive officer Jensen Huang refers to as a new industrial revolution.
“Global demand for Nvidia’s AI infrastructure is incredibly strong,” Huang said.
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Nvidia shares had earlier closed at US$134.81 in New York, leaving the stock little changed in 2025.
Sales in the first quarter, which ended Apr 27, rose 69 per cent to US$44.1 billion. That compared with an average estimate of US$43.3 billion.
That growth would be enviable for most chipmakers, though it was the smallest percentage gain in two years. Profit was 96 US cents a share, minus certain items. Wall Street was looking for 93 US cents.
The data centre unit, a division that’s larger by itself than all of Nvidia’s nearest rivals combined, had sales of US$39.1 billion. That was just shy of the average estimate of US$39.2 billion. Gaming-related sales – once Nvidia’s main business – were US$3.8 billion. Analysts projected US$2.85 billion on average. Automotive was US$567 million.
One lingering question is whether US trade restrictions on China will hinder Nvidia’s long-term growth. In April, the Trump administration placed new kerbs on exports of data centre processors to Chinese customers, effectively shutting Nvidia out of the market. The chipmaker said on Wednesday that it incurred a US$4.5 billion writedown because of the issue.
“The broader concern is that trade tensions and potential tariff impacts on data centre expansion could create headwinds for AI chip demand in upcoming quarters,” Emarketer analyst Jacob Bourne said in a note.
Nvidia also disclosed that it’s facing scrutiny inside China, where regulators have demanded that it keep supplying local companies in return for regulatory approval of its acquisition of Mellanox. The company warned that it may face penalties in that case. Nvidia completed the purchase of Mellanox, a maker of networking technology, in 2020.
“Regulators in China are investigating whether complying with applicable US export controls discriminates unfairly against customers in the China market,” it said. “If regulators conclude that we have failed to fulfil such commitments or we have violated any applicable law in China, we could be subject to financial penalties, restrictions on our ability to conduct our business.”
Nvidia, which first gained famed selling graphics cards to gamers, has become an AI powerhouse in the past two years. The Santa Clara, California-based company was quick to realise the potential for what it calls accelerated computing – a hardware-and-software arrangement that is setting the stage for machines that can learn and reason such as humans.
The chipmaker’s ascent to a market value of more than US$3 trillion, about 10 per cent of the total value of the Nasdaq, has investors judging it by extremely high standards. They have become accustomed to rapid growth and stratospheric profitability. Even marginal misses relative to those lofty estimates stoke fears about the AI boom slowing down.
Nvidia accounts for about 90 per cent of the market for AI accelerator chips, an area that’s proven extremely lucrative. This fiscal year, the company will near US$200 billion in annual sales, up from US$27 billion just two years ago.
While Nvidia is being squeezed out of China, other policy changes may help open up additional markets. The US president recently visited Saudi Arabia and other states in the Middle East, where he announced large AI projects. That reversed a push by his predecessor to clamp down on the region’s access to AI technology. BLOOMBERG
