Nvidia (NVDA) stock price edges up 0.5% in premarket trading on Wednesday

Investors had been fearing a slowdown in AI adoption, but the latest earnings reports provided some insight into where things stand.

At least one part of the market is still booming: AMD showed very positive news. The company reported record quarterly revenue of $7.4 billion, up 36% compared to the same period last year.

AMD's data center segment in particular showed strength, with revenue increasing 57% year over year to reach $3.7 billion, surpassing analyst expectations.

During the earnings call, CEO Lisa Su directly addressed concerns about AI momentum. She described an "outstanding start to 2025" and specifically mentioned "expanding data center and AI momentum."

This statement is significant for Nvidia investors, as it suggests the AI revolution is not slowing down. However, the earnings reports also highlighted some challenges facing the industry.

Export Controls Weigh Heavily

AMD warned that U.S. export controls on semiconductors would cost them $1.5 billion in revenue this year.

This impact is even larger for Nvidia, which has already disclosed a $5.5 billion charge related to inventory and purchase commitments for its H20 chip designed for the Chinese market.

According to analysts at Jefferies, this could translate to around a $10 billion hit to revenue for Nvidia.

Super Micro Computer, which makes servers that house Nvidia chips, reported earnings at the top end of its guided range but provided disappointing guidance for the current quarter.

The company noted that some customers were delaying decisions, which could be linked to the transition between Nvidia's older Hopper hardware and its new Blackwell processors. Despite these setbacks, Nvidia remains in an extremely strong market position.

According to Chainalysis data cited by The Information, Nvidia controlled as much as 98% of the data center GPU market in recent years.

While competition has increased with the emergence of AMD and startups like Cerebras, the overall market continues to grow rapidly, benefiting Nvidia.

The broader AI market is also expanding at an impressive pace. According to Bloomberg Intelligence, the generative AI market could be worth $1.3 trillion by 2032.

McKinsey & Company offers an even more bullish outlook, calculating that generative AI could add between $2.6 trillion and $4.4 trillion to the global economy over the next decade.

PricewaterhouseCoopers went further, valuing the potential contribution at $15.7 trillion by 2030.

Nvidia's stock price has faced pressure recently, falling 16% since the start of 2025. This drop, combined with the company's growing profits, has led some to view it as a buying opportunity.

The stock is currently selling for 26 times forward earnings, which many consider reasonable for a company at the center of the AI revolution.

Nvidia's fourth-quarter results from fiscal 2025 (ended January 26) showed revenue of $39.3 billion, representing 78% growth year over year. Earnings per share reached $0.89, an 82% increase.

Despite these impressive results, Nvidia's stock had declined about 14% since that report was released in early February.

In Wednesday's premarket trading, Nvidia shares were up 0.5% at $114.13. The stock had fallen 0.3% in Tuesday's regular session, closing at $113.80.

Super Micro shares were down 4% in premarket trading, while AMD was up 2.6% and Broadcom was rising 0.9%.