Nvidia Reports $44.06 Billion Revenue Amid Export Restrictions Impacting H20 Chip Sales

Hadisur Rahman, Jadetimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: ANN WANG/REUTERS

Nvidia announced on May 28 that it generated $44.06 billion in revenue for the first quarter, driven by a remarkable 73% year-over-year growth in its data center business. This impressive financial performance comes despite a significant $4.5 billion charge related to excess inventory and purchase obligations, a consequence of export restrictions imposed by the Trump administration on the H20 chip intended for the Chinese market.

During the company's investor call, CEO Jensen Huang stated, "The H20 export ban ended our Hopper data center business in China," emphasizing the profound impact of these restrictions. He further noted that the $50 billion AI chip market in China is now "effectively closed to U.S. industry," highlighting the challenges faced by American tech companies in accessing this lucrative market.

Initially, Nvidia had anticipated a $5.5 billion charge due to the export restrictions, but the company managed to mitigate some of the financial impact by reusing materials. Despite these efforts, Nvidia reported a loss of $2.5 billion in H20 revenue for the quarter, underscoring the significant toll of the export ban.

Following the earnings announcement, Nvidia's stock experienced a positive reaction in after-hours trading, fluctuating between a 4% and 5% gain. The company's gross margin for the quarter was reported at 61%, but it would have reached 71.3% without the adverse effects of the export restrictions.

Earnings per share stood at 81 cents, which would have been 96 cents if not for the incurred charge. Looking ahead, Nvidia projects revenue for the current quarter to be around $45 billion, while anticipating an $8 billion loss in H20-related revenue due to ongoing export limitations.

In a press release accompanying the earnings report, Huang emphasized the resilience of Nvidia's artificial intelligence business, stating, "Countries around the world are recognizing AI as essential infrastructure just like electricity and the internet." This sentiment reflects the growing global demand for AI technologies, even amid political tensions that pose challenges for U.S. tech firms.

As Nvidia navigates these complexities, its ability to adapt and innovate will be crucial in maintaining its leadership position in the rapidly evolving AI landscape.