nvidia defies china chip ban with soaring q1 revenues

2025-05-30 nvidia

Santa Clara, Friday, 30 May 2025.
despite facing a $4.5 billion hit from trump-era export controls to china, nvidia reports a 69% surge in q1 revenue. demand for data center solutions offsets china losses. nvidia continues investing in u.s. production and ai chip development. marvell technology forecasts strong revenue growth driven by custom ai chips. nvidia expects to lose $8 billion in q2 due to export controls. ceo huang stated that china’s ai will develop with or without u.s. chips.

q1 2026 financial highlights

Nvidia’s Q1 fiscal year 2026 revenue reached $44.1 billion, marking a 69% increase year-over-year [1]. The surge was primarily fueled by a 73% year-over-year increase in data center demand, which amounted to $39.1 billion [1]. Despite these gains, the company faced a $4.5 billion loss in Q1 due to export controls on H20 AI chips to China [1]. Nvidia anticipates an $8 billion revenue loss in Q2 because of these restrictions [1]. This mixed performance reflects both Nvidia’s robust growth in key sectors and the challenges posed by geopolitical factors.

market reaction and stock performance

Following the earnings release, Nvidia’s stock experienced a surge in after-hours trading, climbing nearly 5% [6]. This positive market reaction underscores investor confidence in Nvidia’s ability to navigate challenges and capitalize on AI-driven opportunities [6]. Nvidia’s stock closed at $134.81 per share on May 28, 2025, giving the company a market capitalization of approximately $3.288 trillion [6]. Capital markets appear to be responding more rationally to Nvidia’s growth, with several institutions raising their target stock price [6].

china market dynamics

Huang acknowledged the complexities of the Chinese market, stating that the U.S. export controls have essentially closed off a $50 billion AI chip market to American companies [3][6]. He also noted that Nvidia’s H20 export ban has ended their Hopper architecture’s presence in Chinese data centers [6]. Despite these challenges, Chinese customers contributed $4.6 billion in H20 chip sales before the restrictions took full effect, representing 12.5% of Nvidia’s Q1 revenue [6]. Nvidia is exploring alternative strategies to compete within the constraints of the export controls [6].

blackwell architecture and future growth

Nvidia’s data center business is experiencing substantial growth, driven by global demand for AI infrastructure and the strong performance of its Blackwell architecture [6]. Chief Financial Officer Colette Kress indicated that Blackwell products accounted for nearly 70% of data center revenue in Q1, signaling a near completion of the transition from Hopper [6]. Nvidia is also making advancements in manufacturing, with improved production yields and faster delivery of Blackwell-powered systems [6]. Microsoft has already deployed tens of thousands of Blackwell GPUs and plans to expand this with OpenAI to hundreds of thousands of GB200 units [6].

broader ai landscape and competition

Marvell Technology is also anticipating strong revenue growth, driven by the demand for its custom AI chips that power AI workloads in data centers [2]. Marvell expects its second-quarter revenue to be around $2 billion, a figure that is within a 5% margin of error [2]. CFRA Research analyst Angelo Zino believes that custom silicon will be the primary growth driver for Marvell over the next three to five years [2]. Nvidia is also emphasizing its AI infrastructure capabilities, exemplified by the recent release of NVLink Fusion, to compete with the increasing number of companies designing their own chips [6].

export control implications

The U.S. government’s export control policies are based on the assumption that China cannot produce competitive AI chips [1][3]. Huang has challenged this assumption, asserting that China possesses significant manufacturing capabilities and that restrictions will only strengthen Chinese chipmakers [1][3]. The Trump administration has expanded export controls to include chip design software, potentially impacting Nvidia’s operations in China [5]. These restrictions target major EDA companies, including Cadence, Synopsys, and Siemens EDA, which hold a substantial share of the global EDA market [5].

Bronnen

ai chips export controls