AI boom and robust data centre sales offset US export curbs as investors shrug off geopolitical risk
Nvidia (NASDAQ:NVDA) shares closed 3.3% higher on Thursday after the company posted better-than-expected earnings, triggering a global rally in semiconductor stocks and easing investor concerns over ongoing US export restrictions to China.
The results cemented Nvidia’s role as the bellwether for AI-related hardware demand, with revenue surging 69% year-on-year to US$26bn for the April quarter. Data centre revenue, Nvidia’s core growth engine, rose 73% to US$22.6bn, as cloud providers and governments continued investing heavily in AI infrastructure.
CEO Jensen Huang said demand for Nvidia’s new Blackwell chips — designed to accelerate AI inference — was “surging,” with Microsoft already deploying tens of thousands. About 70% of the data centre division’s sales were driven by Blackwell, according to CFO Colette Kress, who also reported the fastest ramp-up in Nvidia history for the NVL72 variant.
Despite incurring a US$4.5bn write-down and missing out on an estimated US$2.5bn in Q1 sales due to the US ban on H20 chip exports to China, Nvidia raised its full-year outlook. The company now expects second-quarter revenue of US$28bn, underpinned by “broad-based demand” for AI systems.
Huang, however, struck a more sombre tone on the earnings call, warning that US export curbs — aimed at limiting China’s access to advanced AI chips — risked undermining American leadership in global technology stacks. He said China, a potential US$50bn market for Nvidia, was increasingly turning to local players like Huawei, and that the current policy may “backfire.”
Even so, investors appeared focused on near-term growth. Major chipmakers including AMD, TSMC, and SK Hynix rallied in response to Nvidia’s results. European semiconductor stocks also gained, with ASML and ASM International trading higher.
Morgan Stanley and JPMorgan both reaffirmed bullish outlooks, citing Nvidia’s “durable” growth drivers and product leadership. Deutsche Bank’s Ross Seymore noted that demand for AI inference was growing exponentially, describing Nvidia’s positioning as “central” to the AI transformation.
Shares of Nvidia are up more than 110% year-to-date.
