NVDA

The world's premier AI chip stock posted another brilliant earnings report overnight, soaring 6% in the after-hours and struggling to add even more value in the pre-market trading today. Resurfacing from under $135 as a closing price on May 28, NVIDIA gained at least $8 per share helping the S&P 500 benchmark to reach almost 6,000 points, as futures went less than 5 points short of reaching this key round figure. NVIDIA's evident success was actually a beacon of hope for many investors around the world this time. Strong and ever-growing AI demand is a declaration into future rallies for other bright members of the big tech giants' family. All those megacaps, including Google, Meta, Broadcom, Microsoft, Amazon and even Apple, which has been recently hit by trade barriers issues with possible 25% levies for iPhones in the U.S., received a powerful boost in the form of several percent growth right away. As I can see, NVIDIA is both a valuable investment asset in its own right and a lifesaver for pulling up the rest of my tech portfolio, proving that all bets were made correctly.

As for specifics, Nvidia is generally projecting only a $8 billion hit from new export and import chip rules, meaning the scale of U.S.-China chip ban and tariff expectations. The damage from curbs is not as bad as it was feared by the pool of Wall Street analysts. Nvidia earnings' official transcript detailed that the actual Q1 cost due to restrictions was already $1 billion less than expected because it was able "to re-use certain materials". As a result, the company lost $2.5 billion in H20 chip sales and is going to miss $8 billion in Q2. The H20 provided $4.6 billion of sales and China accounted for just 12.5% of the total Q1 revenue. This probably meant that Chinese customers were stocking up on enough H20 chips ahead of tougher US restrictions.

Before that, Nvidia CEO Jensen Huang estimated the revenue impact related to the restrictions at about $15 billion. He argued that the segment is still at risk of being cut off from China’s massive AI developer base as China’s chip industry is closing in on the United States’ dominance, but he clearly praised U.S. president Donald Trump’s recent decision to revoke his supposed "AI diffusion rule" that previously threatened to regulate global flows of chips too thoroughly. "President Trump wants America to win. And he also realizes that we’re not the only country in the race," Huang said. After saying that, he'll be fine, I'm pretty sure, as well as the market's crowd.

Huang also added that globally "AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate..." as "countries around the world are recognizing AI as essential infrastructure — just like electricity and the internet — and Nvidia stands at the center of this profound transformation. Meanwhile, the "enterprise AI" is still in "its early stages" so that "we are at the beginning of the AI infrastructure build-out". He said that Nvidia’s Hopper chips could no longer be modified for the Chinese market but did not comment on its cutting-edge Blackwell chips. Meanwhile, Reuters reported that Nvidia is preparing a Blackwell version, which would be fit for the Chinese market with updating regulations.

As for the other numbers, Nvidia generated its Q1 adjusted profit of $0.96 per share on revenue of $44.06 billion while the market consensus pointed at per-share income of $0.93 and revenue of $43.31 billion. All numbers are absolute records as the previous highest achievement was $0.90 per share on $39.33 billion so far. Thus, Nvidia added nearly $4.7 billion within three months. The company's data center unit, which is used to create the core revenue, saw a 73% jump 73% to $39.1 billion. Gaming revenue was up 42% YoY. Besides, Nvidia said it has $29.8 billion "in commitments" to have its products manufactured. If you think that is not enough to consider Nvidia as still a strong Buy, even at current levels, then I don't know what else you need to change your point of view. The degree of optimism in the analytical community was perhaps best reflected by Wedbush analyst Daniel Ives' sacred phrase that "The Godfather of AI Delivers Again".