Good morning. Nvidia remains the bellwether for the artificial intelligence trade, but its latest quarterly results reflect both the company’s continued dominance and the mounting headwinds it faces from export restrictions and margin pressures.
For the quarter ending on April 27, the chipmaker reported a 69% spike in revenue from a year ago, reaching $44.1 billion—surpassing Wall Street’s projection of $43.2 billion. This surge was powered by ongoing demand for Nvidia’s AI chips, which remain essential to the world’s largest tech companies as they race to build out AI infrastructure.
However, profits came in at $18.8 billion, down from $22 billion last quarter and missing the $19.5 billion mark analysts expected. Diluted earnings per share fell to $0.76 from $0.89 last quarter. Gross margins dipped to 60%. Last quarter, CFO Colette Kress said Nvidia expected its margins to start the year in the low 70% range as the company ramped up production of its next-generation Blackwell chips, Fortune reported.
The impact of new U.S. restrictions on AI chip sales to China was a major factor behind the margin pressure. Nvidia reported a $4.5 billion charge related to inventory and purchase obligations for its H20 chips, which are now restricted from the Chinese market.
“Losing access to the China AI accelerator market, which we believe will grow to nearly $50 billion, would have a material adverse impact on our business going forward and benefit our foreign competitors in China and worldwide,” Kress said on Wednesday’s earnings call.
Nvidia expects these export controls to result in a loss in H20 revenue of approximately $8 billion for the current quarter, she said. This comes after the company already incurred a $15 billion loss in sales from earlier rounds of restrictions.
Nvidia’s forecast for the current quarter is $45 billion in sales, Kress said. That’s slightly below Wall Street’s $46 billion projection. “We expect modest sequential growth across all of our platforms,” she said.
Nvidia and the AI revolution
Wedbush Securities analysts remain bullish on Nvidia’s prospects, highlighting growing demand from sovereign wealth funds and Middle Eastern buyers. “There is one chip in the world fueling the AI revolution and it’s Nvidia…That narrative is clear from these results and the positive commentary from [CEO] Jensen [Huang],” the analysts wrote in a Wednesday evening note. This is a very important guide for “the broader tech world and it shows the AI revolution is heading into its next gear of growth despite the Trump tariff war playing out,” the analysts noted.
Nvidia’s results remain a pivotal pacesetter for the broader tech sector, according to Natalie Hwang, founding managing partner of Aperia Capital. “This is a moment to further assess the durability of the AI thesis and how to position capital across a tech stack that’s rapidly converging,” Hwang told me in an email. “Whether you’re looking at semis, infrastructure, or applied AI, we believe Nvidia’s performance will influence how capital flows through the system as we navigate a more volatile macro environment marked by shifting trade policy and renewed tariff concerns.”
As Nvidia rolls out its next-generation Blackwell chips and navigates an increasingly complex global trade environment, its ability to maintain AI leadership will be closely watched by investors and the tech industry alike.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Dawn Hooper was promoted to CFO of Jack in the Box Inc. (Nasdaq: JACK), a restaurant company, effective immediately. Hooper, a Jack in the Box veteran of 25 years, previously served as interim principal financial officer, and most recently held the role of SVP and controller. She has been with the company since October 2000 and throughout her tenure has held key leadership roles, including assistant controller, VP of financial reporting, and senior manager of corporate accounting.
Owen Barwell was appointed CFO of BioMADE, a U.S. Department of Defense-funded nonprofit. Barwell joins the organization from the U.S. Nuclear Regulatory Commission, the domestic regulator for commercial nuclear power plants. He brings over 35 years of experience spanning the federal, public, and private sectors across the energy, professional services, aerospace, commercial real estate, and rail industries.
Big Deal
“Federal court strikes down Trump’s tariff program, ruling he didn’t have the power to impose them” is a new Fortune report by Amanda Gerut.
From the report: “The United States Court of International Trade rule ruled on Wednesday that President Donald Trump did not have authority to ‘impose unlimited tariffs on goods from nearly every country in the world’ and blocked Trump’s prized tariff program.
“The ruling struck down tariffs of 25% on Canada and Mexico and 20% on products from China in addition to the 10% baseline tariff on all the U.S. trading partners. The court ruled the International Emergency Economic Powers Act (IEEPA), which Trump relied on as the basis for his power to unleash the tariffs, did not give him unbounded authority. The court wrote ‘any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional.’”
Going deeper
“Outsourcing vs. Offshoring: Why Consumers Push Back on Jobs Sent Abroad” is a report in Wharton’s business journal. Wharton’s Stefano Puntoni finds that consumers react more strongly when local jobs are moved overseas compared to other reasons for collective layoffs.
Overheard
“As my scheduled time as a special government employee comes to an end, I would like to thank President Donald Trump for the opportunity to reduce wasteful spending. The DOGE mission will only strengthen over time as it becomes a way of life throughout the government.”
—Billionaire Tesla CEO Elon Musk announced Wednesday in a post on X the end of his formal role as an unpaid special government employee with the Department of Government Efficiency (DOGE). Some have noted the timing seemed to coincide with a CBS News interview teased on Tuesday, in which Musk said that he was disappointed in President Trump’s ‘Big, Beautiful Bill’ and that it “undermines the work that the DOGE team is doing,” Fortune reported.
