Nvidia, a leading U.S. chip manufacturer, announced a remarkable 69% increase in revenue during the first quarter of 2024, driven largely by soaring sales of its advanced chips during the artificial intelligence (AI) boom. However, the companyโs shares, alongside those of other semiconductor manufacturers, experienced significant declines after U.S. President Donald Trump imposed tariffs and stricter export regulations in April.
Reacciรณn del mercado
Following the release of Nvidiaโs impressive earnings report on Thursday, Wall Street responded positively, with stock prices rising in early trading after a federal court blocked many of Trumpโs tariffs. Nvidia reported quarterly profits of $18.8 billion (ยฃ13.9 billion), resulting in a 6.4% rise in its stock value. Jensen Huang, the companyโs CEO, emphasized the strong global demand for Nvidiaโs AI infrastructure and expressed optimism that demand for AI computing would continue to grow.
Context of Export Restrictions
In April, the U.S. government restricted the sale of Nvidiaโs โH20โ chips designated for the Chinese market, leading to a downturn in demand and a projected $5.5 billion impact on revenue, which the company revised down to $4.5 billion. Mr. Huang reiterated his expectation for a future surge in demand for AI computing, framing the current challenges as opportunities for growth.
Analystsโ Perspectives
Dan Ives, a prominent analyst, characterized Nvidiaโs earnings and forward guidance as a โvery positive resultโ amidst a volatile trade environment marked by tariff disputes. Analysts noted that Nvidiaโs performance reflects resilience in the tech sector, even with ongoing geopolitical tensions and export controls.
Geopolitical Challenges
Nvidiaโs strategic outlook remains clouded by changing trade policies. The company highlighted that new tariffs and export controls have added complexity and increased costs to its supply chain. In response, Nvidia plans to enhance its manufacturing capabilities in the U.S. Last week, Huang criticized the U.S. restrictions on advanced chip exports to China, deeming them a โfailureโ that ultimately harms American companies. Meanwhile, recent reports indicate Trumpโs administration is urging U.S. chip software suppliers to halt sales to Chinese firms, aiming to impede Chinaโs chip development efforts.
Impacto mรกs amplio en la industria
Jacob Bourne, an analyst at Emarketer, noted that these export restrictions underscore the geopolitical pressures facing the tech industry and that Nvidia will need to navigate a complex landscape of competition and economic challenges to maintain its market dominance.
Despite these hurdles, Nvidia has also found success with new customers, including government agencies in the Gulf states. Earlier this month, Huang accompanied President Trump to the Middle East, where the company announced plans to sell hundreds of thousands of AI chips in Saudi Arabia.
Huang underscored the global recognition of AI as essential infrastructure, akin to electricity and the internet, positioning Nvidia at the forefront of a fundamental transformation in technology. In the latest financial results, Nvidiaโs data center business recorded a remarkable 73% annual growth, reflecting the strong trajectory of the company amid a rapidly evolving market landscape.
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