Nvidia reported another blockbuster quarter, with revenue surging 85% to $81.62 billion from $44.06 billion a year earlier, and announced an $80 billion share buyback program alongside a dividend increase [1][2]. Despite these strong results, Nvidia CEO Jensen Huang stated that the company has 'largely conceded' China's artificial intelligence chip market to Huawei due to ongoing U.S. export restrictions, which have effectively shut Nvidia out of the Chinese market—a segment that previously accounted for at least one-fifth of its data center revenue [1]. Huang emphasized that Nvidia has set investor expectations to 'expect nothing' regarding approvals to sell advanced chips into China, though he expressed willingness to return if conditions improve [1].
The U.S. export controls have accelerated China's push for semiconductor self-sufficiency, with Huawei and other local chip companies experiencing strong growth as Nvidia exits the market [1]. While some Chinese firms reportedly received approval to purchase Nvidia's H200 chips, a U.S. trade representative clarified that chip export controls were not discussed during recent China talks, suggesting no imminent easing of restrictions [1].
Nvidia's stellar earnings had a significant market impact, fueling a sharp rally in AI-related stocks. SoftBank Group shares soared over 16% after five consecutive sessions of losses, driven by its exposure to the AI boom through its stake in Arm Holdings and its investment in OpenAI [2]. Arm Holdings shares also closed over 15% higher in U.S. trading hours, buoyed by renewed optimism around a potential OpenAI listing and the broader AI momentum signaled by Nvidia's results [2]. SoftBank's investment gains in OpenAI totaled $45 billion in the year ended March, and analysts at Fitch Ratings unit CreditSights reiterated an 'outperform' recommendation on SoftBank Group debt, citing the rally in Arm Holdings shares as materially strengthening the conglomerate's balance sheet [2].
Nvidia is also expanding its supply chain in anticipation of continued growth in the AI economy, with CEO Huang describing the potential for the company to become 'many times larger' [1].
CONCLUSION
Nvidia's exceptional earnings and strategic repositioning in the AI chip market have had a pronounced ripple effect, driving significant gains in related stocks such as SoftBank Group and Arm Holdings. While Nvidia faces challenges in China due to export restrictions, its strong performance continues to reinforce optimism in the global AI sector.