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Nvidia sparking a chip rally after topping first-quarter expectations with revenue soaring 69%. The company also warning of an $8 billion revenue hit in the second quarter due to China export rules. CEO Jensen Huang says the curbs weaken America's position.

China is one of the world's largest AI markets and a springboard to global success. With half of the world's AI researchers based there, the platform that wins China is positioned to lead globally. Today, however, the $50 billion China market is effectively closed to US industry. China's AI moves on with or without US chips.

Joining us now, we've got Antoine Chkaiban, who is the New Street Research Technology Infrastructure Analyst. Just want to start with your biggest takeaways from the results, especially considering what we just heard in the soundbite there from Jensen Huang.

Yes, hey Brad and Alison. Thanks for having me. So, yeah, of course, there's this $8 billion headwind in the second quarter. And despite that, you have Nvidia guiding data center revenues up modestly. So that's, you know, a very significant guide up if you account for the headwind. And I think the key takeaway here is that there's a surge in inference demand. You know, all these reasoning models that have been introduced over the course of the year, O3, O4, deep seek, you know, that are capable of generating a lot of tokens to improve upon their answers. That's driving a lot of demand for compute and that's I think is the key takeaway from this earnings. Of course, that translates into a lot of demand for the latest generation Blackwell. I think there were a lot of concerns around potentially production challenges there. I was in Asia last week. I got the opportunity to talk about the supply chain. And indeed, Nvidia faced a lot of challenges. It's a very challenging product to ramp. And now, we have visibility into 1,000 of these racks being installed at their hyperscale customers every week. So you know, that's kind of dismissing any concern around inventories building up at OEMs for Blackwell. So I would say those are the key takeaways from the print yesterday.

And I know you mentioned in your notes you sent over to us that you are still buyers of any weakness. What is your long-term bull case for Nvidia, especially given some of the concerns that we'll get to regarding some competition with China specifically?

Yes, so on the demand side of things, you know, our view is that the token is the new transistor. That's our motto. So when you're able to innovate at a pace that allows you to lower the cost per token, that drives tremendous demand. And you know, to go back to the reasoning models I was talking about earlier, there's an opportunity to solve humanity's greatest challenges by putting AI at work, you know, in data centers, in huge data centers that are going to comprise millions of XPUs in the next couple of years. Putting those data centers at work to try and solve quantum physics, to try and help companies design products, to try and help governments, you know, optimize their budget. And I think, you know, that's that's our long-term view for AI in general. Now, with regards to your question on competitive dynamics, so there's the China problem. There's more generally, you know, the debate around whether hyperscalers are going to ramp in-house chips. I would say, you know, Nvidia has a head start, clearly, because they have a very strong ecosystem. They have a very large installed base. People know how to use their GPUs. You know, you have universities who are teaching their students with Nvidia GPUs and who have been doing so for 10 years, like in computer science departments. And so that's very hard, you know, to to break that kind of ecosystem strength. And then with regards to China, so yes, as Jensen mentioned yesterday, there is a huge market there. And if Nvidia doesn't address it, if the US platforms don't address it, well, China is of course ramping. You know, we've heard about Huawei's Ascend chip who who is reportedly becoming competitive, excluding these ecosystem barriers. Who is becoming, you know, competitive on paper progressively? I mean, there's still a gap, but they're trying to catch up, you know? And and if you don't, you know, maintain Nvidia's leadership thanks to its ecosystem, and you allow, you know, that new ecosystem to emerge, well, yes, that's a lost opportunity for the US. So that's, you know, Jensen's message yesterday as well.