NVIDIA reported its financial results for the first quarter of fiscal 2025, delivering revenue that exceeded expectations but falling short on several other key indicators. The company posted revenue of $44 billion, surpassing analysts forecast of $43.29 billion. At the same time, earnings per share amounted to 96 cents excluding sanctions, but taking them into account, it was only 81 cents, which was lower than the forecast of 93 cents. A major factor impacting performance was the U.S. government’s restrictions on the export of the H20 GPU to China, which resulted in a revenue loss of $2.5 billion for the quarter. Looking ahead, NVIDIA’s management anticipates a revenue drop of $8 billion in the second quarter, projecting total revenue of $45 billion, which is below the $45.5 billion analysts had expected. These developments raise significant concerns about NVIDIA’s future in the Chinese AI market, particularly as the company faces challenges in developing a product that complies with U.S. regulations while remaining competitive in China.
Across its divisions, NVIDIA reported mixed performance. The network solutions segment outperformed expectations, generating $4.96 billion in revenue compared to the forecast of $3.54 billion. However, other key segments including data centers, computing, and automotive solutions failed to meet expectations. Notably, the data center segment, which is the company’s most important business area, brought in $39.1 billion, slightly below the projected $39.2 billion. On a more positive note, NVIDIA highlighted the rapid adoption of its Blackwell architecture, particularly within cloud services, which now account for nearly half of the revenue in the data center segment. Additionally, the company managed to control operating expenses effectively, reporting $3.58 billion in spending versus the expected $3.63 billion.
Despite the overall decline in the company’s stock since the beginning of the year, investors responded positively to the earnings report. NVIDIA’s shares rose by 5.5% during the earnings call, buoyed by strong performance in network solutions, the strategic positioning of the Blackwell architecture, and effective cost management. Nevertheless, the growing uncertainty surrounding NVIDIA’s operations in China continues to pose a risk to its future growth and market dominance, especially in the AI sector.