Sumit Roy
2 min read
The AI trade got a fresh boost on Thursday after semiconductor titan Nvidia Corp. (NVDA) reported strong first-quarter results that exceeded Wall Street expectations on both revenue and earnings, despite the loss of billions in China sales due to U.S. export restrictions.
Revenue for the first quarter came in above forecasts, but guidance for the second quarter gave investors brief pause. The company said it expects sales of $45 billion, plus or minus 2%, which falls slightly short of the $45.4 billion consensus estimate. At first glance, that might seem like a significant miss for a company that investors have grown accustomed to beating and raising guidance.
But Nvidia noted that the guidance includes an estimated $8 billion hit from chip export controls to China. Excluding that impact, the guide would have been closer to $53 billion, well above expectations.
That realization likely fueled Thursday’s rally, which saw Nvidia shares surge as much as 6.4% to $143.49, bringing the stock within striking distance of its all-time high of $149.43 set in January.
The rebound marks a sharp turnaround from April, when shares fell below $87 intraday amid escalating trade tensions. Since then, Nvidia has helped lead the broader market recovery, as enthusiasm around artificial intelligence continues to dominate investor sentiment.
While China restrictions are undoubtedly a headwind, the market is taking comfort in Nvidia’s ability to grow elsewhere. Demand for its AI chips—used to power the supercomputers behind applications like ChatGPT—remains intense. Cloud giants like Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN) and Oracle Corp. (ORCL) continue to clamor for Nvidia’s chips to both run internal operations and offer AI infrastructure to customers.
Nvidia is also expanding its footprint globally, striking sovereign AI deals with countries like Saudi Arabia and the UAE, where governments are investing heavily in local AI infrastructure.
For ETF investors, Nvidia remains a cornerstone of many AI-themed strategies. The largest AI-themed ETF by assets under management, the $3.2 billion Global X Artificial Intelligence & Technology ETF (AIQ), holds a 2.8% position in Nvidia—a modest weighting considering the company’s outsized role in the AI ecosystem.
But funds like the $2.6 billion Global X Robotics & Artificial Intelligence ETF (BOTZ) offer more concentrated exposure. Nvidia currently has a 9.7% weighting in the fund.
The $1.6 billion iShares AI and Innovation Tech Active ETF (BAI) is another major holder, currently allocating 9% of its portfolio to the company.
