Nvidia Smashes Through China Ban Barrier—Stock Rockets to All-Time High

Silicon defiance pays off: Nvidia’s chips—and share price—just laughed in the face of geopolitical trade walls.

Wall Street’s favorite GPU peddler hit record valuations today, proving once again that tech giants play by their own rules. When regulators build walls, semiconductor titans just design faster vaulting poles.

Funny how export bans never seem to dent the bottom line of companies with 90% market dominance. Almost like... they might’ve priced in the political theater from day one?

TLDR

• Nvidia reported 69% revenue growth to $44.1 billion in Q1, beating expectations despite losing $10.5 billion in China chip sales due to trade restrictions
• The company’s data center business grew 73% year-over-year to $39.1 billion, driven by AI chip demand
• Nvidia briefly became the world’s most valuable company at $3.4 trillion market cap, finishing second behind Microsoft
• CEO Jensen Huang positioned the China export controls as potentially temporary, suggesting they could become bargaining chips in trade negotiations
• New AI technologies like reasoning models and AI agents are driving demand 100 times higher than previous AI models

Nvidia delivered another knockout quarter that sent its stock soaring and briefly made it the world’s most valuable company. The AI chip Maker posted first-quarter revenue of $44.1 billion, up 69% from last year and ahead of Wall Street expectations.

The company’s data center business drove the growth with $39.1 billion in revenue, up 73% year-over-year. This performance came despite losing access to a massive chunk of Chinese business due to export restrictions.

Nvidia’s stock jumped 3.3% on Thursday, pushing its market value to $3.4 trillion. For a brief moment, it surpassed Microsoft to claim the title of world’s most valuable company before settling into second place.

The quarter wasn’t without challenges. President Trump’s decision in April to ban sales of Nvidia’s H20 chips to China created an $8 billion revenue hole for the current quarter.

Nvidia quantified the total impact at $10.5 billion across two quarters. This transparency helped investors understand that without the China restrictions, the company WOULD have easily beaten guidance expectations.

China Ban Creates Unexpected Opportunity

CEO Jensen Huang framed the export controls as both a challenge and potential opportunity. He argued the restrictions hurt American national security interests by keeping Nvidia out of a huge AI market.

Wedbush analyst Dan Ives sees the China situation as potentially temporary. He believes ongoing US-China trade negotiations could restore Nvidia’s access to Chinese markets with new restricted chip designs.

The chip ban could become a bargaining chip in broader trade discussions between Washington and Beijing. China still wants advanced AI chips, creating leverage for future negotiations.

Huang emphasized Nvidia’s commitment to US manufacturing while critiquing the policy approach. He suggested the export controls might hamstring American companies more than Chinese competitors.

The company’s ability to absorb an $8 billion revenue hit and still post strong growth demonstrates the strength of global AI demand outside China.

New AI Technologies Drive Massive Demand Surge

Nvidia’s growth story extends beyond traditional AI applications. The company is benefiting from three major trends that require exponentially more computing power.

Reasoning models represent the biggest demand driver. These AI systems perform multiple thought computations to generate higher-quality responses, consuming 100 times more compute resources than previous models.

AI agents are moving from concept to reality. These systems can take simple directions and complete complex, multi-step tasks automatically, driving enterprise adoption.

Sovereign AI deals are creating new revenue streams. Nvidia announced major contracts with Saudi Arabia for 18,000 AI servers and the UAE for new AI clusters going live next year.

NEWS: Saudi Arabia and NVIDIA will build AI factories powering the next wave of intelligence.

NVIDIA will help deploy AI infrastructure, strengthen the regional ecosystem, and train developers and scientists—fueling growth and prosperity in the region. ➡️https://t.co/v1rlz6xBXM pic.twitter.com/JFSMzdtvoN

— NVIDIA Newsroom (@nvidianewsroom) May 13, 2025

The Saudi deal alone could expand to “several hundred thousand” GPUs over five years. Huang mentioned multiple unannounced European deals during the earnings call.

Supply constraints had worried investors, but CFO Colette Kress provided reassuring updates. Major cloud companies are now deploying nearly 1,000 GB200 server racks weekly, with each rack costing several million dollars.

Microsoft alone expects to purchase hundreds of thousands of GB200 chips. The next-generation Blackwell Ultra chips began test shipments in May, with production shipments starting this quarter.

Meta and Microsoft both increased their AI infrastructure spending plans rather than cutting back as some analysts had feared. This contradicted concerns about reduced capital expenditure budgets.

Nvidia stock has gained nearly 40% from its April trade war lows and trades at 29 times forward earnings with expected 45% sales growth over the next 12 months.