AI Demand Propels Nvidia Amid Trade War Woes

28 May at 5:17 pm

3332 posts

AI Demand Propels Nvidia Amid Trade War Woes \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Nvidia posted strong quarterly growth despite Trump-era tariffs and export restrictions, with AI chip demand driving revenue to $44.1 billion. The company’s stock rebounded as investor fears eased and Big Tech reaffirmed AI investment plans. CEO Jensen Huang pledged to expand U.S. production and explore Middle East markets amid global trade tensions.

Quick Looks

Nvidia reported $44.1 billion in quarterly revenue, up 69% year-over-year.
Net income hit $18.8 billion, or 76 cents per share.
Adjusted EPS would be 96 cents excluding a $4.5 billion China-related charge.
Export controls cost Nvidia $2.5 billion in Q1, $8 billion forecast in Q2.
Trump’s fluctuating trade policy initially rattled tech markets, including Nvidia.
Stock rebounded over 4% post-earnings after strong Q1 results.
Nvidia’s stock fell to $86.62 in April, now near pre-inauguration levels.
CEO Huang committed to U.S. chip manufacturing in Arizona and Texas.
Nvidia seeks new markets in the Middle East with Trump’s support.
Big Tech’s $325B AI investment projected to heavily favor Nvidia.

Deep Look

Nvidia Soars on AI Strength Despite Trade War Pressures Under President Trump

In a performance that defied political and economic turbulence, artificial intelligence powerhouse Nvidia reported a robust first fiscal quarter, showcasing resilience amid President Donald Trump’s shifting trade policies and heightened export controls. Despite a volatile start to the year driven by aggressive tariff threats and restrictions on semiconductor sales to China, Nvidia’s earnings far exceeded analyst expectations, reinforcing its dominance at the center of the global AI revolution.

From February through April, Nvidia earned $18.8 billion, or 76 cents per share—a 26% increase from the same quarter last year. Revenue jumped an astonishing 69% year-over-year, reaching $44.1 billion. Notably, the company absorbed a $4.5 billion charge due to ongoing U.S. government restrictions on high-end chip sales to China. If not for that hit, Nvidia would have reported adjusted earnings of 96 cents per share—well above Wall Street’s consensus estimate of 73 cents.

This performance came as global markets remained jittery over Trump’s escalating trade war, which had previously sent Nvidia’s shares plummeting. The stock, once trading as low as $86.62 in April, recovered to $134.81 by Wednesday’s close—nearly regaining pre-inauguration levels. It gained another 4% in after-hours trading following the earnings release.

Trade Tensions and AI Resilience

Trump’s on-again, off-again tariff policy has been a source of tension for Nvidia and other major tech players heavily reliant on international markets. Although some of the former president’s proposed tariffs have been reduced or postponed, uncertainty surrounding U.S.–China trade relations continues to loom large. Export restrictions alone cost Nvidia $2.5 billion in the first quarter and are expected to wipe out an additional $8 billion in the upcoming fiscal quarter.

Yet, despite these headwinds, Nvidia’s growth story is being powered by one of the most disruptive technological shifts in decades: the AI boom. With Nvidia’s advanced GPUs and AI-focused semiconductors serving as the backbone for massive cloud infrastructure and generative AI systems, demand has remained insatiable.

“Global demand for NVIDIA’s AI infrastructure is incredibly strong,” CEO Jensen Huang stated, highlighting the company’s strategic importance in a rapidly transforming digital economy.

Big Tech Bets Big on AI—and Nvidia

Nvidia’s surge is further buoyed by consistent AI investment from tech giants like Microsoft, Alphabet, and Meta Platforms. These companies reaffirmed aggressive AI spending plans this spring, signaling ongoing reliance on Nvidia’s hardware. According to Wedbush Securities, Big Tech is projected to pour $325 billion into AI infrastructure in 2025—much of which is earmarked for Nvidia’s processors and systems.

This flood of capital has helped Nvidia grow annual revenue from $27 billion to $130 billion in just two years, placing it at the heart of a global tech race to harness artificial intelligence across industries.

A Strategic Pivot to U.S. and Middle East Manufacturing

To counter the impact of strained U.S.–China relations and to align more closely with the Trump administration’s reshoring agenda, Nvidia has pledged to ramp up domestic manufacturing. CEO Jensen Huang recently announced that portions of Nvidia’s AI chip production and supercomputing assembly will shift to facilities in Arizona and Texas.

The company is also looking to diversify its market reach. Huang accompanied President Trump on a diplomatic trip to Saudi Arabia earlier this month, signaling Nvidia’s intention to expand its AI footprint in the Middle East. As Gulf nations pivot away from oil dependence, AI development and digital infrastructure have become key investment priorities, making Nvidia’s offerings increasingly attractive.

Trump Administration Rolls Back Biden-Era Controls

In a move favorable to Nvidia and other U.S. chipmakers, President Trump rescinded scheduled export control expansions originally planned under President Joe Biden. The expanded restrictions would have further limited Nvidia’s global sales beyond China and Russia. With the rollback, Nvidia retains greater flexibility to access global markets, particularly in emerging economies where AI investment is surging.

The softened stance is seen as part of Trump’s broader effort to position the U.S. as a leader in AI technology without alienating strategic markets or disrupting the momentum of domestic tech giants.

Conclusion

Despite political uncertainty and global trade headwinds, Nvidia continues to defy gravity with relentless growth fueled by the AI arms race. President Trump’s fluctuating trade policy initially spooked investors, but Nvidia’s staggering performance has calmed nerves and reinforced its position as the crown jewel of the AI revolution.

As Big Tech doubles down on AI and geopolitical maneuvering opens new doors, Nvidia’s outlook remains strong—even in the face of tariff tensions, export restrictions, and a reshaped global market.