Nvidia's Data Center Revenue Surges 73% Year-Over-Year, Despite Export Restrictions

In the recently concluded fiscal quarter, Nvidia, a leading player in the artificial intelligence (AI) chip market, demonstrated resilience against export restrictions imposed by the Trump administration, maintaining overall stable performance. The company reported that the new export restrictions resulted in a 45 billion dollar expense related to H20 chip products, which was lower than the company's initial estimates. Despite the significant impact of the H20 revenue reduction, the total revenue guidance for the current quarter remained largely in line with market expectations.

Analysts noted that the revenue guidance indicated strong demand for Nvidia's most advanced and highest-priced Blackwell chips. The company expects the top-tier Blackwell Ultra chips to begin shipping this quarter, which could boost future revenue and gross margin guidance. Nvidia's CEO, Jensen Huang, announced that the Blackwell NVL72 AI supercomputer, designed for inference, has begun full-scale production. He emphasized the strong global demand for Nvidia's AI infrastructure, with AI inference tokens increasing ninefold in just one year. Huang also highlighted that China is one of the largest AI markets globally and a key region for Nvidia's success.

Nvidia's data center revenue grew by 73% year-over-year, slightly below the previous quarter's 93% growth but still exceeding market expectations. The company highlighted several key projects, including collaborations with Saudi AI enterprise Humain to build an AI factory in Saudi Arabia and partnerships with G42, OpenAI, Oracle, SoftBank, and Cisco to create the global version of the "Stargate" AI infrastructure cluster in Abu Dhabi. Analysts from Wedbush suggested that the growing demand in the Middle East could offset the impact of restricted sales in China, potentially adding 1 trillion dollars to the global AI market over the next few years.

In other segments, Nvidia's gaming and AI PC business revenue reached a record 38 billion dollars, surpassing analyst expectations and reversing the previous quarter's 11% decline. The automotive and robotics business grew by over 70%, although it fell short of analyst projections. For the second quarter, Nvidia's revenue guidance is 450 billion dollars, with a gross margin of 72.0%, reflecting a significant rebound from the previous quarter's 61% due to H20-related impacts. The company aims to maintain a gross margin of around 70% for the remainder of the year.