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Nvidia NVDA reported fiscal first-quarter revenue of USD 44.1 billion, ahead of guidance and up 69% from the year-ago period. Second-quarter revenue guidance of USD 45 billion would represent 50% year-over-year growth. Both figures incorporate lost revenue from China due to US export controls.
We’re encouraged by Nvidia’s revenue growth despite being blocked from selling H20 products (custom-built for China’s artificial intelligence market). This caused a USD 4.5 billion inventory write-off and foregone revenue of USD 2.5 billion and USD 8.0 billion in the first and second quarters, respectively.
First-quarter data center revenue of USD 39.1 billion was up 73% year over year, as almost 70% of revenue came from Nvidia’s latest Blackwell products. Of this revenue, USD 4.6 billion came from H20 sold into China before the restrictions were enacted on April 9, 2025.Nvidia’s gaming revenue was a bright spot, up 48% sequentially and up 42% year over year, as new gaming products based on the Blackwell architecture were well-adopted.
Nvidia Geographic Sales Breakdown
Nvidia generated USD 9.0 billion, or 20%, of revenue in the first quarter from Singapore. Nvidia disclosed once again that several customers prefer to bill out of Singapore, but almost certainly ship Nvidia’s products to the rest of the world. This quarter, Nvidia made the important additional disclosure that 99% of its AI products (H100, H200, B200) billed out of Singapore are for orders from US-based customers. We think this disclosure might help to assuage some investor concerns that Nvidia’s revenue includes some hidden China business. Overall, we assume that such revenue, if it exists at all, is immaterial to our estimates or our view of the business.
Nvidia’s Data Center Business Recovery
Within data center, Nvidia saw a nice recovery in networking revenue, up to nearly USD 5 billion and up 64% sequentially and 56% year over year after a soft quarter of only USD 3.0 billion in the January quarter. We remain impressed with Nvidia’s ability to elbow out from GPU designs into networking gear. We suspect that Nvidia’s Ethernet business is boosted by its ability to bundle with its best-of-breed and hard-to-obtain GPUs, but the company now counts many large cloud vendors as key customers.
Long-Term Demand Outlook for Nvidia
Thinking about long-term demand, US deals with Saudi Arabia and the United Arab Emirates for AI buildouts are promising for Nvidia and its AI peers. On the results call, CEO Jensen Huang discussed how “every country needs to build out AI infrastructure.” It’s hard to be pessimistic about AI when it appears to be emerging as an area of national security for leading countries worldwide. If we were to frame bullish scenarios for Nvidia, government demand will likely have to be a large part of the story as various countries support buildouts as a strategic imperative. In these bullish scenarios, however, this capacity needs to not only be built, but also fully utilized by developers in these regions.
The Bottom Line for Nvidia Stock
We raise our fair value estimate for wide-moat Nvidia to USD 140 per share from USD 125 as Blackwell supply (and revenue) expanded faster than we anticipated and should support higher long-term AI revenue. We retain our Very High Morningstar Uncertainty Rating.
Shares rose about 5% after hours following the results and appear fairly valued, as we think the market was similarly impressed by Blackwell and calmed by Nvidia’s ability to grow despite China export controls.
Coming up for Nvidia
Nvidia expects revenue in the July quarter to increase about 3% sequentially, with modest growth across all segments. Growth would have been 14% sequentially and 77% year over year if Nvidia were allowed to sell USD 8.0 billion of H20 products into China as desired.
The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.
