Nvidia witnessed a new record in its first-quarter revenue, beating analysts’ projections. However, the profits fell short due to the recent imposition of new export restrictions. The chipmaker reported adjusted earnings of 81 cents per share and revenue growth of 69% year-over-year, reaching a record $44.06 billion. A majority of the company's revenue, 73% to be exact, came from its data center segment totaling $39.1 billion.
CEO Jensen Huang accredited the gains to the global demand for Nvidia's AI infrastructure, which is growing at an exceptional rate. He noted that AI inference token generation has increased tenfold within a year. As AI continues to become more mainstream, Huang anticipates an acceleration in the demand for AI computing.
Nvidia's quarterly sales surpassed analysts' predictions compiled by Visible Alpha. Profits didn't meet expectations largely due to a $4.5 billion charge incurred from restrictions placed on the sales of its H20 chips to China. This charge was lower than the anticipated $5.5 billion. Excluding this charge and the resulting tax impact, Nvidia's report shows an EPS of 96 cents, which is above the estimated figures.
Moving forward, Nvidia expects an $8 billion reduction in the current quarter due to potential loss of revenue from H20 chip sales. The company is predicting a quarterly revenue of approximately $45 billion, slightly lower than what the market expects.
In the wake of this report, Nvidia’s shares increased by over 5% in after-hours trading, reaching just above $141, the highest since February. If this upshot in shares continues, Nvidia may surpass Microsoft in terms of market capitalization, becoming the world's most valuable company.