How Nvidia can convince investors to keep buying stock

A $1 billion (£740 million) revenue beat and detailed guidance on the resumption of China shipments underpin Wall Street’s requirements heading into NVIDIA Corp (NASDAQ:NVDA) results Wednesday night.

The semiconductor giant has been the best performing of the Magnificent Seven so far this year, allowing it to overtake Microsoft Corp (NASDAQ:MSFT) as the world’s most valuable company at $4.4 trillion.

• Invest with ii: Most-traded US Stocks | Buying US Shares in UK ISA | Cashback Offers

The shares have risen by a third in 2025, or by 90% since April’s Liberation Day sell-off, having initially been one of the worst hit stocks of the Trump administration.

Sentiment has more than overcome the impact of White House restrictions on H20 chip exports to China, which meant Nvidia incurred a $4.5 billion charge in May’s first-quarter results due to excess inventory and purchase obligations.

Nvidia gave a forecast for revenues in the second quarter of about $45 billion, an outlook that took into account $8 billion of lost H20 revenues due to the export control limitations.

In keeping with Nvidia’s record, another big beat against guidance is on the cards after FactSet reported Wall Street expectations for a figure of at least $46 billion.

• Watch our video: Polar Capital Technology: best and worst AI stocks
• The tech funds that have actually beaten the Nasdaq

The upside will be driven by the continued ramp of the recently-launched Blackwell platform, which unlocks generative AI for the likes of Microsoft, Meta Platforms Inc Class A (NASDAQ:META) and other firms building AI data centres.

Founder and chief executive Jensen Huang said at the first-quarter results: “Global demand for Nvidia’s AI infrastructure is incredibly strong.

“Countries around the world are recognising AI as essential infrastructure — just like electricity and the internet — and Nvidia stands at the center of this profound transformation.”

Earnings for the quarter are expected to be $1.01 a share, having delivered a series of modest surprises in recent results compared with the shock-and-awe presentations of 2023-24.

There will be a lot riding on guidance for the rest of the year, particularly in light of Nvidia’s agreement that it will pay the US government 15% of Chinese revenues as part of a deal to secure export licences.

• Sign up to our free newsletter for investment ideas, latest news and award-winning analysis
• Is your global fund really a play on the US?

Deutsche Bank believes that Nvidia's ability to resume shipments to China should create upside to its $50 billion revenue forecast for the third quarter.

However, the bank noted the timing of the shipment ramp and the ability to recapture the entirety of the $18 billion in “lost” annual revenue was currently unclear.

Investors will also be paying close attention to the outlook for the Blackwell business, which made up 70% of Nvidia’s data centre sales last quarter.

This follows a jittery few sessions for Wall Street’s AI trade after the Massachusetts Institute of Technology (MIT) said that 95% of corporations reported no measurable return from their generative AI investments. OpenAI chief executive Sam Altman also said that some investors are “overexcited” about AI.