NVIDIA revenue skyrockets 69% amid strong AI demand
The American chip producer reported a revenue increase of nearly 70% compared to the same period last year, reaching $44.1 billion. Nvidia CEO Jensen Huang speaks of high demand for the company’s products despite economic uncertainty and export restrictions to China.
Nvidia, the American company at the heart of the global revolution supporting artificial intelligence, published a new quarterly report, exciting investors. Revenues amounted to $44.1 billion. This result, representing a 69% year-over-year increase, exceeded Wall Street's expectations, which forecasted $43.3 billion.
Nvidia's CEO, Jensen Huang, emphasized that the company is observing very strong demand for its products. The company's shares rose by nearly 3% in after-hours trading immediately following the announcement of the results. Net income increased by 26% to $18.8 billion, slightly lower than the anticipated $19.5 billion.
Challenges related to exporting to China
However, Nvidia also faces some problems. The company has to deal with the consequences of the trade war led by U.S. President Donald Trump with Beijing and the new export restrictions implemented in April. These restrictions prevent Nvidia from selling AI chips specifically designed for the Chinese market. The company is currently considering how to redesign its chips to serve the Chinese market while complying with the latest U.S. export controls.
Before the publication of the results, analysts warned that new sales restrictions to China could further reduce margins this quarter. Adjusted gross margins, a measure of profitability that excludes operating costs, came in at 71.3%, in line with the 71% that Nvidia expected in its last financial report in February and with what Wall Street had anticipated.
Technical challenges with new chips
Nvidia's margins declined earlier this year, which the company attributed to the transition to more complex and costly Blackwell chip systems introduced last year. Nvidia and its suppliers recently resolved technical issues with Blackwell servers, which threatened to delay their market release.
It's worth noting that the company continues to report impressive financial results despite growing economic uncertainty and export restrictions that have affected its sales in China. Nvidia remains a key player in the global race for dominance in the artificial intelligence technology sector, despite regulatory and technical obstacles.
