Nvidia Navigates Tariff Turbulence

Nvidia has reported strong Q1 results, demonstrating resilience amidst tariff-driven market volatility and export restrictions. Despite a $4.5 billion charge related to the U.S. government's new export licensing requirements for H20 products to China, the company's revenue reached $44.1 billion, a 69% increase year-over-year. This growth was primarily fuelled by the data centre business, which includes AI chips and networking products, achieving a record $39.1 billion in sales, up 73% from the previous year.

CEO Jensen Huang highlighted the strong global demand for Nvidia's AI infrastructure, particularly the Blackwell NVL72 AI supercomputer, now in full-scale production. The company's focus on AI inference and reasoning capabilities is driving significant growth, with AI inference token generation surging tenfold in one year. While trade restrictions and tariffs have increased supply chain complexity and costs, Nvidia plans to increase U.S. manufacturing to mitigate these challenges.

Looking ahead, Nvidia anticipates Q2 revenue of $45 billion, even with an $8 billion projected loss in H20 revenue due to export controls. This positive outlook reflects the company's ability to navigate geopolitical headwinds and capitalise on the increasing global recognition of AI as essential infrastructure.