Nvidia had a strong start. The company beat sales goals in its first fiscal quarter. This happened recently. The news came on Wednesday. But there’s bad news too. It predicts lower revenue for the second quarter. The drop is big. It expects an $8 billion loss. This hit comes from U.S. export limits. The limits target AI chips sold to China.
China is a key market. It buys many of it’s semiconductors. The U.S. tightened rules on exports. This started affecting sales. The curbs aim to protect technology. They stop advanced chips from reaching China. It makes top AI chips. These chips power artificial intelligence. The restrictions hurt the company’s plans.
The first quarter was a success. Nvidia’s sales topped expectations. Investors were happy. Shares rose 4% after hours. The stock stayed steady this year. Last year, it nearly tripled in value. The company leads in semiconductors. Its value is the highest worldwide. But the second quarter looks tough.
The U.S. has been strict for years. It wants to block Beijing’s tech growth. New rules hit it hard. The company lost $2.5 billion in the first quarter. It expects to lose $8 billion more. This is due to the H20 chip. It’s the only AI chip Nvidia can sell to China. The loss could grow. Some say it might reach $15 billion.
Nvidia adjusted well
It reused some materials. This cut the first-quarter loss by $1 billion. The H20 chip still brought in $4.6 billion. China made up 12.5% of revenue. Experts say the impact is less than feared. But the future is unclear. Trade tensions are rising.
Big cloud companies help. Microsoft and Alphabet keep buying. They spend billions on AI data centers. This supports it. But global trade changes worry investors. The AI chip market is growing. Yet, it’s also maturing. New challenges are coming.
CEO Jensen Huang spoke out. He called the curbs a problem. He said China’s AI industry is strong. It’s catching up to the U.S. Huang praised a recent move. President Trump dropped an AI diffusion rule. This could open new markets. Nvidia signed deals in the Middle East. A big data center project started in the UAE. It could use 5 gigawatts of AI power.
Analysts have mixed views. Some see a tough road ahead. Others think it will adapt. The company forecasts $45 billion for the second quarter. This is plus or minus 2%. Wall Street expected $45.9 billion. The gap shows the export hit. Investors watch closely.
Nvidia’s story is big. It shows global trade issues. The U.S. and China clash over tech. This affects companies like Nvidia. The AI boom continues. But politics adds pressure. The company must navigate carefully. Its next steps will matter.
Fans on X are talking. Some cheer the first-quarter win. Others worry about China. Posts show mixed feelings. The debate is lively. People want to see how Nvidia handles this. The tech world waits for updates.
Nvidia’s future depends on action. It needs new strategies. The Middle East deals could help. So could better U.S. policies. For now, the $8 billion hit looms large. The company’s success is at a turning point. All eyes are on it.
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