NVIDIA reports that while export controls weaken chip companies' sales in China, spending on AI chips continues, with quarterly revenues nearly 70%.
NVIDIA reported revenues of $44.1 billion for the quarter ended April 27 on Wednesday, up 69% year-on-year, higher than Wall Street's expectations of $43.3 billion.
But the core designer of the U.S. chip is at the heart of global infrastructure spending to launch AI, saying revenue is expected to be $45 billion this quarter, plus or minus 2%, meaning its revenue may be slightly lower than the Bloomberg consensus estimate of $455.5 billion.
NVIDIA CEO Jensen Huang said the company's demand for its products is "very strong".
The company is driving the impact of U.S. President Donald Trump's trade war with China, as well as new export restrictions in April that prevented it from selling AI chips designed specifically for the Chinese market. Due to these curbs, the group charged $4.5 billion in the April quarter and said it had missed $2.5 billion in sales. Its current period guidance reflects $8 billion in revenue lost in sales in China.
NVIDIA shares immediately grew nearly 4% in after-hours trading after the announcement.
Net income rose 26% to $18.8 billion, slightly below the estimated $19.5 billion.
Adjusted gross margin (a profitability that excludes operating expenses and $4.5 billion in charge) is 71.3%, meeting the company's last earnings report in February, and expectations Wall Street expects.
The company's gross margin outlook for the quarter was slightly higher than the 72% estimate, while analysts expected it to be 71.7%.
NVIDIA's margins fell earlier this year, citing the transition to the more complex and costly Blackwell chip system launched last year. NVIDIA and its vendors recently addressed technical issues with Blackwell servers that could delay promotion.
The results came ahead of the results, analysts warned that new Chinese sales restrictions would bring further down the quarter.
The company is considering how to redesign its chips to serve the Chinese market while complying with the latest U.S. export controls.