Nvidia reports solid Q1 earnings

Semiconductor giant Nvidia yesterday reported strong quarterly results that came in above analysts’ expectations, despite headwinds to its China business.

The good: Demand for AI-powering semiconductors is *checks notes* still high.

• Revenue came in at ~$44.1 billion, up 69% YoY and above Wall Street’s expectations of ~$43.3 billion, largely powered by the company’s data center division, which saw 73% YoY growth and accounted for 88% of total revenue.
• Net income was $18.8 billion for the quarter, up 26% on an annual basis.

The not-so-good: CEO Jensen Huang said the $50 billion Chinese market is “effectively closed” to the company due to export restrictions implemented by the Trump admin in April. Sales took a $2.5 billion haircut in Q1 as a result, and its Q2 revenue guidance of ~$45 billion would have been ~$8 billion higher without the new restrictions, Nvidia revealed yesterday.

Zoom out: The numbers from Nvidia, the last of the Magnificent Seven to report on Q1, caps off a strong quarter for megacap tech stocks—which, not including the semiconductor slinger, reported an average earnings increase of 28% YoY compared with 9% for the rest of the S&P 500.