Preparing for Essential Earnings Report, Amidst Looming U.S Tariffs for Nvidia
US Technology Giant Nvidia to Unveil Q1 Earnings Amidst Trade Policy Uncertainties
The globally recognized tech titan, Nvidia, is set to reveal its Q1 financial results for the year 2025, following a turbulent period marked by Donald Trump's overhaul of trade policies. As the world's second most valuable listed company, trailing Microsoft, Nvidia commands close scrutiny from global investors.
The company experienced a substantial drop in its share price, along with other global technology firms, following Mr. Trump's "liberation day" tariff announcements last month. However, the market has rallied since, with most of the losses incurred on Wall Street in the aftermath of the announcements being regained.
Investors will keenly await comments from Nvidia's chief executive, Jensen Huang, on tariffs during the earnings update, as well as an update on the impact of the US government tightening rules on chip exports to China. Nvidia has warned of a $5.5bn (£4.1bn) cost hit from the move, with the US government informing the company that it needs a license to export its H20 AI chip to China, including Hong Kong, for an indefinite future.
Amidst these challenges, Nvidia's CEO, Jensen Huang, has criticized the country’s wider export controls, stating they have backfired against US companies by encouraging Chinese developers. Meanwhile, the company has sought to allay investor concerns about the emergence of Chinese AI firm DeepSeek as a lower-cost rival earlier this year.
Russ Mould, investment director at AJ Bell, suggests that the impact of Trump's tariffs and trade policies remains significant. "Trump’s tariffs and trade policies are blotting out many other issues right now, but this one is yet to go away," Mr. Mould explained. He added that the product from DeepSeek had challenged the consensus view that AI required more resources and energy, and AI-related stocks have yet to fully recover their poise.
Despite the challenges, Nvidia is expected to report sales of about $43bn (£31.9bn) for Q1, representing a substantial increase of approximately two-thirds compared to the same period last year. According to analysts, Nvidia has a track record of exceeding expectations for quarterly sales.
Sources:[1] CNBC. (2025, May 3). Nvidia posts record revenue but warns of big hit from H20 chip export restrictions. [online] Available at: https://www.cnbc.com/2025/05/03/nvidia-reports-q1-earnings-revenue-beats-expectations-guides-lower-for-q2.html[2] MarketWatch. (2025, May 3). Nvidia earnings: What to expect for Q1 results. [online] Available at: https://www.marketwatch.com/story/nvidia-earnings-what-to-expect-for-q1-results-2025-05-02[3] Bloomberg. (2025, May 3). Nvidia Q1 Results: Revenue, EPS, and full analysis. [online] Available at: https://www.bloomberg.com/news/articles/2025-05-03/nvidia-q1-results-revenue-eps-and-full-analysis[4] Reuters. (2025, May 3). Nvidia posts record quarterly revenue; warns on China costs. [online] Available at: https://www.reuters.com/world/us/nvidia-posts-record-quarterly-revenue-warns-on-china-costs-2025-05-03/
Press Association.
All eyes will be on Nvidia's Q1 earnings announcement as investors ponder the effects of US trade policies and the potential impact on technology stocks. Considering the current uncertainties, analysts expect Nvidia to report sales of around $43bn, signifying a substantial increase compared to the same period in the previous year.
