NVIDIA earnings exceed expectations
What’s happening:-
Shares of Nvidia rose on Thursday, after the company released its first-quarter results.
What happened:-
The world’s most valuable semiconductor company reported stronger-than-expected sales and earnings for its first quarter.However, market reaction to Nvidia’s beat remained subdued due to management’s weak sales forecast for the second quarter.
How were the results:-
The Santa Clara, California-based company reported double-digit growth in sales for the first quarter, after the closing bell on Wednesday. Revenues jumped 69% year-over-year to $44.1 billion, topping consensus estimates of $43.2 billio Adjusted earnings came in at 96 cents per share, which exceeded Wall Street expectations of 88 cents per share.
NVIDIA
Why it matters:-
Nvidia faced an export ban on H20 products to China on April 9. This resulted in a charge of $4.5 billion related to H20 excess inventory and purchase obligations. The company generated H20 product sales of $4.6 billion in the first quarter before the fresh export licensing requirements were implemented.Nvidia’s gross margin of 61% would have been 71.3% if the company hadn’t faced the China-related charge.Nvidia’s Gaming division posted record revenue. Gaming & AI PC revenue surged 42% to $3.8 billion, while Data Center’s topline jumped 73% year-over-year to $39.1 billion.Every nation now sees AI as core to the next industrial revolution, a new industry that produces intelligence and essential infrastructure for every economy. This is the start of a powerful new wave of growth. Grace Blackwell is in full production. We’re off to the races,” CEO Jensen Huang said.The company repurchased shares worth $14.1 billion and spent $244 million in dividend paymentNvidia guided to second-quarter revenue of $45.0 billion, +/- 2%, reflecting an $8.0 billion loss in H20 revenue following the recent export controls. The company expects gross margins between 71.8% and 72.0% for the quarter.
How shares responded:-
Nvidia’s shares gained 3.3% to close at $139.19 on Wednesday following the release of quarterly results. Over the past couple of years, the company’s results have been followed by a stock rally. This time, the stock gained around 28% through the month prior to the release.
What to watch:-
Investors will continue monitoring announcements related to trade polices from Trump administration.
What are the most significant factors currently affecting NVIDIA’s stock price?
One of the most significant recent influences on NVIDIA’s stock has been the tariffs imposed by former President Donald Trump’s administration—particularly those targeting China, which has already faced challenges under the Biden administration in acquiring advanced chips produced by NVIDIA, essential for AI applications.However, the intensity of this trade conflict has eased recently, especially after Trump announced the suspension of certain tariffs to allow for negotiations. Other factors have also supported the stock, including the recent tour of the Middle East by President Trump, accompanied by NVIDIA’s CEO, during which major deals were signed—enhancing the company’s growth outlook.
NVIDIA’s Price Bullish Momentum Loses Steam
On May 12, NVIDIA’s stock price broke above the downtrend line, originating from the January 7 high and continued to climb, reaching a high of 137.38 before pulling back due to profit-taking.The price could be on the way to test key support level at the 200-day moving average, currently positioned at 125.62. A daily close below this level would indicate a potential continuation of the decline toward 115.14, where the 50-day moving average intersects with the downtrend line. However, a potential rebound from the 118.79 support level should also be considered.
Levels to Consider in the Opposite Scenario
If the stock resumes its upward trend, it may retest the resistance level at the February 18 high. A daily close above this level would signal increased bullish momentum, opening the door for a continued rise toward 153.13. In this scenario, the psychological resistance at 150.00 should be closely monitored.
NVIDIA price – Daily Chart
