Nvidia's most impressive achievement to date? How the chipmaker overcame a China ban.

Copyright © HT Digital Streams Limit all rights reserved. Tae Kim, Barrons 4 min read May 30, 2025, 08:29 AM IST NVIDIA GB200 Grace Blackwell Chip, signed by CEO Jensen Huang, and displayed at the May Computex conference in Taiwan. Summary Nvidia earnings do not do its term right. The chipmaker handled the loss of a massive business line and still caused impressive growth. The boom in artificial intelligence roars again – and Nvidia raises the benefits. On Thursday, a post-earnings rally Nvidia briefly made the most valuable company in the world. By the end, it was number 2, barely behind Microsoft, with a market value of $ 3.4 trillion. It comes a day after the company reported a good results of the first quarter in the first quarter and gave a better aspect for the current quarter. But the numbers do not do the term right. Nvidia handled the loss of a massive business line and still caused impressive growth. The turnover for the April quarter was an annual basis of 69% to $ 44.1 billion before expectations. Nvidia’s data center business, mainly driven by the demand for AI chip, grew even faster, by 73% from last year to $ 39.1 billion. To be sure, the guidance of Nvidia was more mixed. For the current quarter ending in July, Nvidia provided an revenue forecast with a $ 45 billion center, which was among the $ 45.9 billion consensus among analysts. This is the first time Nvidia has started with the AI ​​Supercycle two years ago that the chipmaker has disappointed with its prospects. But over the past few weeks, some on Wall Street have got much worse. The cause of the fog is largely beyond Nvidia’s control. It stems from President Donald Trump’s decision in mid-April to effectively prohibit sales of the company’s H20 discs to China. Nvidia has wisely quantified revenue impact on the total of $ 10.5 billion in total in the April and July quarters. This helped investors quickly realize that Nvidia would have increased the leadership of consensus, if not for the H20 effect. This indicates that there is better than expected power in the non-China business. Certainly enough, after an initial earnings hump, Nvidia’s profits accelerated in the after-hours trading. On Thursday, the stock ended by 3.3%, making it one of the S&P 500’s best shares of the day. The good news for Nvidia investors is that the market looks ahead. The China wind winds are largely shown at a risk, with a prospects set back for potential upside forward. Even with all the growth to date, Nvidia CEO Jensen Huang said demand for the company’s AI infrastructure products is still improving. “AI is this incredible technology that will transform every industry,” he said about the earnings call with investors. “We are really at the beginning of it, because accepting this technology is in the early, early stages.” The question of the largest technology companies is still increasing. Some of Wall Street was concerned that the industry would lower its Capeex budgets for the full year to spend hundreds of billions of rands on AI infrastructure, amid macro uncertainty. Instead, the opposite happened. Meta-platforms revealed that it intended to spend more on AI and Microsoft said it was more provider for AI capacity than they expected. Of course, a strong question doesn’t mean much if you can’t serve it. The management of Nvidia also made several concerns about the offer this week. Colette Kress, chief financial officer, said the company’s Blackwell GPU production is standing up, with large cloud computing companies now deploying nearly 1,000 top-of-the-line GB200 Nvl72 server racks on a weekly basis. Each stretch costs a few million dollars. Kress said Microsoft alone is expected to buy hundreds of thousands of GB200s to serve its customers. More importantly, the next AI server of Nvidia, the Blackwell Ultra, is on track. In May, the company sent Test Dispositions of the Blackwell Ultra GB300 Nvl72 AI server to some customers, Kress said, and expected to start production later that term. As a result, Wall Street becomes more optimistic about the prospects for the second half of Nvidia. The report shows a ‘acceleration of the other business except the China headwinds’, wrote Joe Moore, Morgan Stanley analyst. “Everything should get better from here.” Huang points to several growth drivers behind the increasing demand for AI; So -called arguments, agents and sovereign ai. The latest AI models have a reasoning feature that enables them to reflect more thoroughly on a query by performing numerous thinking calculations to get to a higher quality answer. Huang says reasoning consumes more than 100 times more computer sources compared to previous AI models. “Reasoning models drive a step -functioning in demand for deductions,” he said. Inference is the process of generating answers from AI models. Then there are the AI ​​agents who, according to Huang, become a reality. Agents can take simple directions and use complete multistep computer actions that are regularly used to automate boring business and personal tasks. “Agentic AI is changing games,” he said, adding that the technology is finally working and successfully implemented by businesses. Finally, there are sovereign ai. Nvidia recently announced major transactions with Saudi Arabia and the United Arab Emirates. The first phase of the Saudi Arabia’s AI Factory Building contains an order for 18,000 Nvidia AI servers with a potential for several hundred thousand GPUs over the next five years. The UAE agreement expects its first AI group to go next year. Huang said at the conference that there are “a lot of” other transactions that have not been announced, pointing out that he will travel to Europe next week to announce some of them. Nvidia shares are now almost 40% higher than the low of the trade war in April. This is by 4% higher than the year. Even after the recent rally, the stock is not expensive, but it is 29 times an estimate for forward earnings, while analysts expect 45% sales growth over the next 12 months. Compare the numbers with Apple, which trades 28 times with 4% sales growth. Nvidia is much more attractive on a valuation-to-growth basis. With each earnings report, Nvidia looks more like a one-time growth story, such as the early years of the PC Revolution and the iPhone; These are trends that have lasted more than a decade. For Nvidia we are only two years in. Write to Tae Kim on [email protected]. Catch all the business news, market news, news events and latest news updates on live mint. Download the Mint News app to get daily market updates. More Topics #china #Technology Read Next Story