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Key takeaways from Nvidia earnings: China, cloud strength, Blackwell

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Key takeaways from Nvidia earnings: China, cloud strength, Blackwell


KeyBanc's John Vinh on Nvidia Q1 results: There's meaningful upside from here going forward

Nvidia reported strong fiscal first-quarter earnings on Wednesday.

Wall Street was pleased with Nvidia’s continued sales growth, which hit 69% during the quarter. The company’s data center division continues to surge as companies, countries and cloud providers snap up Nvidia graphics processing units, or GPUs, for artificial intelligence software.

“The team continues to maintain a 1- 2 step lead ahead of competitors with its silicon/hardware/software platforms and a strong ecosystem, and the team is further distancing itself with its aggressive cadence of new product launches and more product segmentation over time,” wrote JPMorgan analyst Harlan Sur.

Here are three big takeaways from the company’s earnings:

China could be a $50 billion market for Nvidia, but U.S. export controls are getting in the way

Nvidia expects to sell about $45 billion in chips during the July quarter, it revealed on Wednesday, but that’s missing about $8 billion in sales that the company would have recorded if not for the U.S. restricting exports of its H20 chip without a license.

Nvidia also said it missed out on $2.5 billion in sales during the April quarter thanks to the export restrictions on H20.

Nvidia CEO Jensen Huang said on the company’s earnings call that China represented a $50 billion market that had effectively been closed to Nvidia.

He also said that the export controls were misguided, and would merely encourage Chinese AI developers to use homegrown chips, instead of making an American platform the world’s choice for AI software.

“The U.S. has based its policy on the assumption that China cannot make AI chips. That assumption was always questionable, and now it’s clearly wrong,” Huang said.

He said that export controls were driving AI talent to use chips from homegrown Chinese rivals, such as Huawei.

“We want every developer in the world to prefer the American technology stacks,” Huang told CNBC’s Jim Cramer on Wednesday night.

Nvidia said it didn’t have a replacement chip for China ready, but that it was considering options for “interesting products” that could be sold in the market.

Strength in the company’s Blackwell business balanced out some concerns over the China impact.

“NVIDIA is putting digestion fears fully to rest, showing acceleration of the business other than the China headwinds around growth drivers that seem durable. Everything should get better from here,” said Morgan Stanley analyst Joseph Moore.

Cloud providers are still Nvidia’s most important customers

Nvidia says that it has many customers ranging from sovereign nations to universities to enterprises that want to research AI.

But it confirmed again on Wednesday that cloud providers — companies like Microsoft Azure, Google Cloud, Oracle Cloud Infrastructure and Amazon Web Services — still make up about half of its data center revenue, which reported $39.1 billion in sales during the quarter.

These companies tend to buy the fastest and latest Nvidia chips, including Blackwell, which comprised 70% of Nvidia’s data center sales during the quarter, CFO Colette Kress said on the earnings call.

Microsoft, for example, had already deployed “tens of thousands” of Blackwell GPUs, the company said, processing “100 trillion tokens” in the first quarter. Tokens are a measure of AI output.

And it’ll be first in line to get Blackwell Ultra, an updated version of the chip with additional memory and performance. Nvidia said shipments of those systems will start during the current quarter.

Bernstein’s Stacy Rasgon said the “general outlook and environment overall seems very encouraging” as the company ramps up its Blackwell rollout and compute requirements grow.

“Amid a messy quarter, NVIDIA is comporting themselves extremely well,” he said.

Looking forward: Blackwell and AI inference

For the past few years, many Nvidia GPUs were used for a resource-intensive process called training, where data is processed through an AI model until it gains new abilities.

Now, Huang is talking up the potential for Nvidia’s GPUs to serve the AI models to millions of customers, a process called inference in the industry. He said on the earnings call that is where new surging demand is coming from.

“Overall, we believe NVDA’s technology leadership remains strong, with growth in Blackwell shipments benefitting from exponential growth in reasoning AI and the achievement of economies of scale,” said Deutsche Bank’s Ross Seymore.

Huang says that the latest AI models need to generate more tokens — or create more output — in order to do “reasoning,” which improves AI answers. Of course, Nvidia’s latest Blackwell chips are designed for this, Huang said.

“We are witnessing a sharp jump in inference demand,” Huang said. “OpenAI, Microsoft and Google are seeing a step-function leap in token generation.”

Huang compared modern AI models to the “one-shot” approach that ChatGPT used when it first debuted in 2022, and said that the new models need “a hundred, a thousand times more” computing.

“It’s essentially thinking to itself, breaking down a problem step by step,” Huang said. “It might be planning multiple paths to an answer. It could be using tools, reading PDFs, reading web pages, watching videos and then producing a result.”

Bonus: Jensen’s concerns

Huang struck a notably more somber tone during the call, focusing heavily on the impact of export controls rather than his usual evangelizing about AI’s world-changing potential.

He spoke at length on the call about U.S. chip restrictions and clearly stated how much of an impact the limits have on current and future business.

“The AI race is not just about chips,” he said. “It’s about which stack the world runs on. As that stack grows to include 6G and quantum, U.S. global infrastructure leadership is at stake.”

CNBC’s Kristina Partsinevelos contributed to this article.

Correction: Stacy Rasgon in an analyst at Bernstein. An earlier version misspelled his name.

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Trump could ask Supreme Court to halt tariff block as soon as Friday

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Trump shows no mercy with his tariffs, stocks sink


U.S. President Donald Trump speaks during an event announcing new tariffs in the Rose Garden at the White House in Washington, April 2, 2025.

Chip Somodevilla | Getty Images

The Trump administration said it may ask the U.S. Supreme Court as soon as Friday to immediately pause a federal court ruling blocking many of President Donald Trump‘s tariffs.

The U.S. will seek the “emergency relief” from the nation’s highest court “to avoid the irreparable national-security and economic harms at stake,” it said in a filing in the U.S. Court of Appeals for the Federal Circuit on Thursday morning.

But the government said it will only take that step if the federal appeals court does not quickly issue at least a temporary pause of the tariff ruling.

The comment came as Trump’s top aides are lashing out at the three judges on the U.S. Court of International Trade who struck down his “reciprocal” tariffs on Wednesday night, dealing a major blow to his trade agenda.

At the same time — and as it seeks relief from the higher courts — the Trump administration is asking that the trade-court judges pause any enforcement of their ruling while the case is being appealed.

“We are living under a judicial tyranny,” White House deputy chief of staff Stephen Miller wrote on Thursday in response to the ruling, escalating his initial claim that “the judicial coup is out of control.”

Top trade advisor Peter Navarro accused the court of being “globalist” and “pro-importer” on Bloomberg TV Thursday, and claimed it was biased against the administration’s tariff policies.

“We have these unelected judges who are trying to force their own will when it comes to tax policy, trade policy and all matters of the economy,” Trump advisor Jason Miller said during a Fox Business interview Thursday morning.

Those three judges — Jane Restani, Timothy Reif and Gary Katzmann — were appointed to the federal bench by two Republicans, Presidents Ronald Reagan and Trump, and one Democrat, Barack Obama, respectively.

Their ruling Wednesday invalidated dozens of country-specific tariffs that Trump imposed earlier this year under the purported authority of the International Emergency Economic Powers Act.

The judges found that the law does not “confer such unbounded authority” to presidents.

The nationwide, permanent block they imposed covers all of the retaliatory tariffs that Trump issued in early April as part of his sweeping “liberation day” plan to reshape international trade with the rest of the world.

The ruling also bars the administration from making any future modifications to the tariffs in question. The court gave the administration 10 days to make the necessary changes to carry out the orders.

The Trump administration filed a notice of appeal shortly after the judgment came down.

Read more CNBC politics coverage

Trump and the other defendants in the case have also asked the trade court to pause enforcement of its ruling while the appeal process plays out.

“It is critical, for the country’s national security and the President’s conduct of ongoing, delicate diplomatic efforts, that the Court stay its judgment,” Department of Justice attorney Sosun Bae wrote.

Bae pointed to declarations from Secretary of State Marco Rubio, U.S. Trade Representative Jamieson Greer, Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent, who all warned that the ruling would “destroy” a preliminary trade agreement reached with China earlier this month, and throw future negotiations into doubt.

If the trade court’s ruling survives the upcoming appeals, it could strike a major blow to Trump’s economic agenda.

Tariffs and trade protectionism are a pillar of the president’s worldview. More recently, he has leaned heavily on the promise of tariffs to generate federal revenue as he seeks to cut taxes and increase military spending.

In the meantime, however, Trump has other means of imposing import taxes unilaterally.

Goldman Sachs economists pointed to three relatively obscure parts of U.S. trade law that could come into play soon: Sections 122 and 301 of the Trade Act of 1974, and Section 338 of the Trade Act of 1930.

Navarro projected optimism about the administration’s choices on Thursday.

“Any trade lawyer knows there’s just a number of different options we can take,” he said. “There is all sorts of things we can do well within the law.”

“So nothing has really changed here in that sense,” Navarro added.



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Global Markets, U.S. Futures Rise After Trump Tariffs Blocked by Court

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Global Markets, U.S. Futures Rise After Trump Tariffs Blocked by Court




Global stocks and U.S. stock-index futures rose early Thursday after the U.S. Court of International Trade on Wednesday struck down Trump’s global tariffs.



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