Nvidia(US:NVDA) Di Yi Cai Jing·2025-05-29 01:19Core Viewpoint - Nvidia's CEO Jensen Huang stated that the U.S. export controls on AI chips to China are a failure, highlighting fundamental flaws in the initial assumptions behind the AI diffusion rules [3]. Financial Performance - Nvidia reported a 69% increase in overall revenue for the quarter ending April 27, reaching $44.1 billion, with net profit rising 26% to $18.8 billion [1]. - The data center segment, which includes AI chips and related components, saw sales growth of 73%, totaling $39.1 billion and accounting for 88% of total revenue [1][3]. - Nvidia's stock price rose approximately 4% in after-hours trading following the earnings report, bringing its market capitalization close to $3.3 trillion [1]. Market Dynamics - Major cloud service providers contributed nearly half of the revenue in the data center segment, with around $5 billion in sales coming from networking products used to connect Nvidia chips for AI research [3]. - Nvidia's market share in China has decreased from 95% at the beginning of the Biden administration to 50% currently due to U.S. export restrictions [3]. Impact of Export Controls - Nvidia anticipates a sales loss of approximately $8 billion due to recent U.S. export restrictions on the H20 chip [3]. - The company incurred a $4.5 billion charge due to excess inventory related to the restricted chip [3]. - Excluding costs associated with the Chinese market, Nvidia's gross margin for the quarter would have been approximately 71.3%, higher than the reported 61% [3]. Strategic Initiatives - Nvidia has signed new agreements in the Middle East, including a data center project in the UAE that may eventually utilize 5 gigawatts of AI infrastructure [4]. - Similar projects have been announced in Saudi Arabia and Taiwan, with expectations of requiring tens of gigawatts of Nvidia's AI infrastructure in the near future [4].