Despite absorbing a $4.5 billion charge related to new U.S. export restrictions on its China-bound H20 chips, NVIDIA Corporation (NASDAQ: NVDA) reported record first-quarter revenue of $44.1 billion on Wednesday, exceeding analyst expectations.
At $134, NVIDIA’s stock ended yesterday’s trading session. However, they are up over 5% in premarket trading on Thursday, hitting $142, the highest level in three months.
Furthermore, two independent analysts have predicted that NVIDIA’s stock could soon rise by 35%, possibly reaching an all-time high of $185.
For the three months ending April 27, 2025, NVIDIA reported adjusted earnings per share of $0.81, exceeding the $0.93 consensus estimate, and revenue of $44.06 billion, exceeding the anticipated $43.31 billion.
However, mainly because of the continued effects of China export restrictions, the company’s guidance for the current quarter, which was about $45 billion, was less than analyst estimates of $45.9 billion.
During the quarter, the company’s data center division—which includes artificial intelligence chips and related components—generated $39.1 billion in revenue, which accounted for 88% of total revenue and represented a 73% increase over the same period last year.
This performance demonstrated how much demand there is still for AI infrastructure around the world.
“Global demand for NVIDIA’s AI infrastructure is incredibly strong,” CEO Jensen Huang said in a statement. “AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.”
Large cloud service providers accounted for just under half of the data center unit’s revenue, while networking products contributed $5 billion in sales.
Chief Financial Officer Colette Kress noted that Microsoft has “deployed tens of thousands of Blackwell GPUs and is expected to ramp to hundreds of thousands” of the company’s GB200 product.
On April 9, the U.S. government announced new export licensing requirements for NVIDIA’s H20 processors going to China, which had a major impact on the quarter’s results.
Due to excess inventory and purchase obligations for the specialized chips, which were primarily made for the Chinese market, the company was charged $4.5 billion.
H20 product sales in the first quarter were $4.6 billion before the export restrictions, and NVIDIA was unable to ship an additional $2.5 billion in H20 revenue during that time.
Without the charge related to China, the company’s 61% gross margin would have increased to 71.3%.
“The H20 export ban ended our Hopper data center business in China,” Huang told investors during an earnings call, describing the $50 billion Chinese AI chip market as “effectively closed to U.S. industry.”
How High Can NVIDIA Stock Go? Analyst Outlook Remains Positive
NVIDIA’s other business segments demonstrated strong growth in spite of the challenges posed by China.
Strong sales of the company’s new Blackwell architecture chips helped the gaming division reach a record revenue of $3.8 billion, up 42% from the previous quarter and 42% from the previous year.
Increased sales of chips and software for self-driving cars were the reason for the automotive and robotics division’s 72% yearly growth to $567 million.
The wider use of Ada RTX workstation GPUs contributed to a 19% increase in professional visualization revenue to $509 million.
The quarter’s net income was $18.8 billion, or $0.76 per share, as opposed to $14.9 billion, or $0.60 per share, during the same time last year. Adjusted earnings per share, excluding tax effects and H20-related charges, would have been $0.96.
Recognizing that uncertainty surrounding NVIDIA’s China business continues to be a significant factor in the stock’s performance, DA Davidson increased its price target from $120 to $135 while keeping a neutral stance.
Additionally, the business declared that shareholders of record as of June 11 would receive a quarterly dividend of $0.01 per share on July 3.
NVIDIA distributed $244 million in dividends and spent $14.1 billion on share repurchases during the quarter.
With an estimated $8 billion loss in H20 revenue as a result of export control restrictions, NVIDIA projects second-quarter revenue of $45 billion, plus or minus 2%.
As it strives for mid-70% gross margins later this year, the company projects GAAP and non-GAAP gross margins of 71.8% and 72.0%, respectively.
