Solid Q1 Nvidia Earnings Power NVDA Stock Toward the Highs, No Mistake
Nvidia's latest earnings and a purported policy shift from the Trump administration are accelerating the rise in the NVDA stock, even though
Quick overview
- Nvidia's stock rally is fueled by strong earnings and speculation of a policy shift from the Trump administration regarding chip export bans.
- The company reported Q1 earnings with revenue of $44.1 billion, exceeding expectations, although gross margins fell short.
- Nvidia's datacenter segment saw a significant year-over-year growth of 93%, highlighting its dominance in AI infrastructure.
- Technical indicators suggest a bullish continuation for Nvidia, with the stock breaking key resistance levels and aiming for new all-time highs.
Live NVDA Chart
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Nvidia’s latest earnings and a purported policy shift from the Trump administration are accelerating the rise in the NVDA stock, even though tech demand remains a significant growth driver.
Washington Winds Shift in Nvidia’s Favor
Momentum behind Nvidia’s rise has been amplified by speculation that the Trump administration may repeal a major chip export ban imposed during Biden’s term, which was originally set to take effect on May 15. The Biden-era restriction introduced a three-tiered framework targeting advanced processor exports to countries like China. If lifted, this would be a major tailwind for U.S. semiconductor giants like Nvidia, easing inventory pressure and reopening a lucrative market.
Pre-Earnings Strength and Datacenter Dominance
Ahead of the earnings release, Nvidia was already drawing attention after reporting $35.58 billion in fiscal Q4 revenue, marking a 16% sequential increase. Its datacenter segment, which serves as the backbone of large-scale AI model infrastructure, surged 93% year-over-year, further anchoring Nvidia’s core growth narrative.
The Q1 Nvidia Report exceeded expectations once again in Q1 with EPS: $0.96 vs. $0.93 expected, Revenue: $44.1 billion vs. $43.29 billion forecast. However, despite the top-line beat, gross margins and EBIT were underwhelming with Adjusted gross margin up by 61% vs. 71% expected and EBIT at $21.64 billion vs. $26.97 billion expected. So, the actual report was better and analysts expect this momentum to carry well into mid-2025. The NVDA stock price has soared around 6%, taking the share price above $140, opening the door for early January highs.
Nvidia Q1 Earnings Snapshot – Mixed Beats and Margins Under Pressure
- Earnings per share (EPS) came in at $0.96, beating expectations of $0.93.
- Total revenue was $44.1 billion, above the forecast of $43.29 billion.
- Adjusted gross margin fell short at 61%, missing the 71% estimate – a notable margin compression.
- EBIT (Earnings Before Interest and Taxes) was reported at $21.64 billion, well below the expected $26.97 billion.
Segment Highlights:
- Data Center Revenue reached $39.1 billion, slightly below the $39.22 billion estimate.
- Compute Revenue came in at $34.16 billion, missing the $35.47 billion forecast.
- Networking Revenue surged to $4.96 billion, beating expectations of $3.45 billion, showing strength in that segment.
Outlook and Commentary:
- Nvidia guides Q2 revenue at $45 billion ± 2%, slightly below the Street’s forecast of $45.5 billion.
- Q2 adjusted gross margin is projected between 71.5% and 72.5%, in line with estimates (71.7%).
- The company missed out on $2.5 billion in H20 chip sales during Q1 due to shipment constraints.
- Global AI infrastructure demand remains “incredibly strong,” according to Nvidia’s outlook.
- Q2 guidance includes a forecasted $8 billion sales hit due to restrictions on exports to China, signaling ongoing geopolitical headwinds.
Technical Breakout Signals Bullish Continuation
On the technical side, Nvidia’s stock has broken above its 50-week Simple Moving Average (SMA) around $115, a level that previously served as major resistance. This breakout, following a bounce off the 100-week SMA in April, signals renewed long-term bullish strength.
After hitting $136.30 last week, the next key target was $140 which is now broken, followed by a potential move to $153.13, its all-time high, which will likely be reached and breached soon. A decisive earnings beat and a favorable policy environment could pave the way for new records.
Conclusion: With record-breaking demand in AI infrastructure, a strong Q1 beat, and a potential policy rollback on export restrictions, Nvidia appears poised for continued upside. Investor sentiment has sharply improved alongside the broader semiconductor sector, and technical indicators support the momentum. As the regulatory landscape shifts and AI applications expand, Nvidia’s leadership in the chip industry seems more entrenched than ever.
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