Nvidia Tops Q1 Estimates Despite $8B China Ban Impact on Outlook

Nvidia (NASDAQ:NVDA) surpassed Wall Street expectations in its fiscal Q1 earnings, even as it flagged an $8 billion hit to its Q2 guidance due to U.S. export restrictions on chip sales to China. Shares rose over 4% in after-hours trading following the announcement.

For the quarter ending April 27, Nvidia reported adjusted earnings per share of $0.96 on revenue of $44.06 billion, topping analyst estimates of $0.93 EPS and $43.31B in revenue. The company’s data center division, which drives most of its revenue, grew 73% year-over-year to $39.1 billion, slightly below the $39.36B consensus. Gaming revenue rose 42% from the prior year.

CEO Jensen Huang emphasized soaring demand for AI infrastructure, noting a tenfold surge in AI token generation in the past year. Huang described AI as “essential infrastructure” akin to electricity or the internet, positioning Nvidia at the core of the global AI transformation.

The company disclosed a $4.5 billion charge from the U.S. ban on sales of its H20 chips to China—less than the expected $5.5B—thanks to reusing some materials. However, Nvidia still forecasts Q2 revenue of $45 billion, plus or minus 2%, falling short of the $45.66B consensus due to the ongoing impact of the export restrictions.

Huang added that enterprise AI adoption is in its infancy and predicted more announcements of AI "factories" globally. Wall Street responded positively to the results, with Wedbush’s Daniel Ives calling it another win for “the Godfather of AI.” Ives noted that Nvidia’s gross margin would have been 71.3% without the China-related charges, reinforcing strong demand despite geopolitical headwinds.