Good morning! Nvidia earnings last night led to something that hasn’t happened in a year. In short, investors like what they saw — and that optimism helped lift the entire stock market.

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Wall Street likes the stock

Over the past year, Nvidia’s absurd earnings beats haven’t impressed investors. 

That streak is over. 

Shares of the AI giant soared in after-hours trading Wednesday after it reported blockbuster numbers that surpassed expectations and, crucially, an upbeat forecast that brushed off US-China tensions.

It marked a break from the company’s recent string of post-earnings slumps, and it signals that Wall Street believes the AI trade can still outrun geopolitics, even if that hasn’t happen to start 2025.

By the numbers: 

• Adjusted EPS: $0.96, versus $0.93 expected

• Revenue: $44.06 billion, up 69% year-over-year, versus $43.31 billion expected

• Data center revenue: $39.1 billion, up 73% year-over-year, just under estimates

Notably, the business’s non-GAAP gross margin came in at 61%, but the company said that would have been 71.3% without the China-related write-down of $4.5 billion. 

Despite that hit, and even when accounting for $8 billion in lost China sales, Nvidia projects $45 billion in revenue for the next quarter.

“Global demand for NVIDIA’s AI infrastructure is incredibly strong,” CEO Jensen Huang said in a statement. “AI inference token generation has surged tenfold in just one year, and as AI agents become mainstream, the demand for AI computing will accelerate.”

That outlook resonated with the market. 

Indeed, US hyperscalers like Microsoft, Amazon and Meta are spending billions on Nvidia products to fuel their AI ambitions. The latest numbers don’t point to anything like a slowdown. 

“Countries around the world are recognizing AI as essential infrastructure — just like electricity and the internet — and NVIDIA stands at the center of this profound transformation,” Huang said.”

Meanwhile, an hour before earnings, the Financial Times reported that President Trump directed US chip-design software makers to stop selling their products to Chinese groups. 

Shares of chip design companies Cadence and Synopsys fell roughly 10% each before ticking higher in after-hours trading.

In any case, Nvidia wants everyone to believe it can keep pushing the pace without China. 

Investors, for their part, seem convinced that a trade war will manifest as a rounding error on Nvidia’s balance sheet. 

While the company still faces questions about frothy valuations, customer concentration, and bubbles, Wall Street nonetheless is acting like Nvidia’s $45 billion revenue forecast is a lowball estimate.

Market snapshot

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Elsewhere

❌ A federal court struck down President Trump’s reciprocal tariffs. The Wednesday night ruling concluded that the president exceeded “any authority granted” by the International Emergency Powers Act. (CNBC)

📊GameStop is buying bitcoin. The meme-stock favorite said Wednesday that it purchased 4,710 bitcoins over an unspecified period. Current prices would value the holdings at about $5.1 million, and it’s a move in the direction of MicroStrategy to form a bitcoin treasury. (Barron’s)

🏦 The latest Fed minutes came out Wednesday. Policymakers at their May 6-7 meeting acknowledged potential “difficult tradeoffs” in the form of rising inflation alongside higher jobless rates, and ultimately an increased risk of recession. (Reuters)

Rapid-fire

• Elon Musk said he was disappointed by the price tag on President Trump’s “big beautiful bill” (Yahoo Finance)

• Moscow has expanded military recruitment and boosted weapons production as Putin reshapes Russia’s economy for only war (WSJ)

• AI startup Anthropic appointed Netflix Chairman Reed Hastings to its board of directors (CNBC)

• Macy’s revenue declined 5.1% from a year ago but it beat low earnings expectations (Yahoo Finance)

• Economists expect the latest estimate for first-quarter GDP will show a decline of 0.3% (Barron’s)

• President Trump said any TikTok deal would not mirror the Nippon-US Steel one (Reuters)

Last thing

To get a view from the ground of the Bitcoin 2025 Conference, I did a live Q&A with Bitcoin IRA co-founder Chris Kline, who was attending in Las Vegas. You can listen to the full interview on X:

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].