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Nvidia (NVDA, Financials) just flagged a potential $8 billion sales hit from new U.S. chip export rulesbut the market barely blinked. Shares rose 4% after hours as Q1 results came in strong, and Wall Street appeared unfazed by the Q2 outlook miss.
The company expects $45 billion in revenue this quarter, slightly below the $45.9 billion analysts had penciled in. That shortfall stems from tighter restrictions on selling H20 AI chips to Chinaits only export-legal option for the market. Still, Q1 adjusted EPS hit $0.96, beating estimates, helped by a rush of Chinese buyers pulling orders forward before the clampdown.
Even with the lost sales, Nvidia recovered $1 billion worth of parts and said China still made up 12.5% of revenue last quarter. It's now leaning on global expansion, with big AI infrastructure projects rolling out in the UAE, Saudi Arabia, and Taiwan. CFO Colette Kress told investors the company is seeing tens of gigawatts of AI demand just over the horizon.
Yes, geopolitical risks are rising. But for now, Nvidia's growth story still resonatesjust not without a few bumps along the way.
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This article first appeared on GuruFocus.