Nvidia spikes after earnings and guidance top Wall Street estimates (NVDA)

nvidia ceo jensen huang

Nvidia on Thursday reported first-quarter results that topped Wall Street estimate.
The midpoint for Q2 revenue was above estimates.
Shares were up more than 5% in after-hours trading.
Watch Nvidia trade live.

Nvidia reported on Thursday reported strong first-quarter results, sending shares up more than 5% after the closing bell.

The chipmaker earned an adjusted $0.88 a share on revenue of $2.22 billion, topping the $0.81 and $2.19 billion that analysts surveyed by Bloomberg were expecting.

"NVIDIA is back on an upward trajectory," said cofounder and CEO Jensen Huang. "We've returned to growth in gaming, with nearly 100 new GeForce Max-Q laptops shipping. And NVIDIA RTX has gained broad industry support, making ray tracing the standard for next-generation gaming."

Looking ahead to the second quarter, Nvidia sees revenue of $2.55 billion at the midpoint, plus or minus 2%. That was better than the $2.53 billion that analysts were hoping for.

Nvidia, and other chipmakers have been under pressure for much of the past month as trade tensions between the US and China have reignited.

Last week, President Donald Trump raised tariffs on $200 billion worth of Chinese goods to 25% and said another $325 billion of Chinese goods could soon see their tariffs go up. China responded by hiking tariffs on $60 billion of US goods.

The renewed trade tensions have put semiconductor shares under the microscope as they are particularly sensitive to Chinese demand.

"A major concern here, the products would be deemed mission-critical and the US would prevent shipments to China, or tax them heavily (a large buyer of GPUs)," RBC analyst Mitch Steves wrote in a recent note.

"We think China trade talks will negatively impact our universe. Most notably, we think GPUs and Semi-cap are most at risk to the downside if tensions continue to rise."

Ahead of the release, SunTrust Robinson Humphrey analyst William Stein said investors should focus on the company's long-term growth prospects and not the short-term volatility that has been impacting its share price.

"We believe NVDA's IP (chips and software) address some of the most attractive end markets in all of tech (Gaming, server acceleration, AI training & inference, and autonomous driving) that represent a >$100B TAM in the mid-2020s," he wrote.

"The company's competitive advantage is not isolated to its GPU chips (which competitors can market), but instead relate to its culture of innovation, software tool investment, and ecosystem of incumbency."

Stein has a "buy" rating and $210 price target — 31% above the $160 where shares were trading on Thursday.

Nvidia was up 20% this year through Thursday's closing bell .