Semicon's Next Move Post-NVDA earnings

On Thu, 29 May 2025 morning, after going through $NVIDIA(NVDA)$ Q1 2026 earnings, I thought it was safe to assume that the chip leader will close on a high by end May.

Afterall, it has beaten Wall Street’s estimates for both top and bottom lines. (see below)

NVDA’s Earnings.

As per LSEG estimates:

  • Revenue: surged to $44.1 billion vs $43.31 expected vs Q1 2025’s $26 billion This marked a +69% YoY gain.

  • Earnings per share (adjusted): came in at $0.96 vs $0.93 expected vs Q1 2025’s $6.12 (pre 10-for-1 stock split). This is a +56.86% YoY gain.

  • Net income: was $18.8 billion vs Q1 2025’s $14.9 billion, recording a +26.17% YoY gain.

  • Gross margin: was 61% or 71.3% (exclude H20 charge) vs Q1 2025’s 78.4%,

The good results came even though Nvidia took a $4.5 billion loss because US export restrictions prevented Nvidia from selling its customize H20 chip to China.

Quarter Guidance / Outlook.

  • For Q2 2025, Nvidia revenue guidance was $45 billion vs LSEG estimates of $45.9 billion, registering a marginal decline.

  • Revenue guidance would have been $8 billion higher if US government did not restrict H20 chips sales to China.

Coupled with a “continous” cooling set of inflation numbers, the prospect couldn’t have been brighter right ? (see below)

Cooling Inflation.

On Fri, 30 May 2025, the other US inflation report - US’s Personal Consumption Expenditure (PCE) report for April 2025 was released before the start of trading day.

  • Headline inflation increased +0.1% for the month, putting the annual inflation rate at 2.1%.

  • Core inflation also was at +0.1% for the month but marginally higher on an annual level at 2.5%.

This is consistent with a cooling US’s Consumer Price Index (CPI) report released in early May 2025. (click here ! for the details).

Trump’s Reciprocal Tariffs timeline:

  • On Wed, 09 Apr 2025, Trumps’ reciprocal tariffs came into effect.

  • On Wed, 14 May 2025, they were halted for 90-days for negotiation between affected countries and US.

Although Trump’s worldwide tariffs were effective for a month before they were halted, it did not lead to an inflation surge as predicted by analysts.

This is because, most US importers have imported more than usual earlier in March 2025 to help lock-in the “before tariffs” supply.

This helped to mitigate the rise in prices for April and until March 2025 import supply runs dry.

This also implies US central bank logically should not be considering, cutting interest rate in the coming June 2025 FOMC meeting because actual impact of US inflation is still unknown.

Tariffs Headwind Again.

What I did not and could not anticipate was another round of tariff unrest, stirred by Trump on Fri, 30 May 2025. (see below)

Again, this shook and caused panic in the US market again because (a) everyone knows, the turbulence that is about to unfold and (b) the 50% tariffs would take effect on Wed, 04 Jun 2025.

More importantly, it is a direct blow to US manufacturers, including (a) semiconductor equipment makers and (b) fab operators who rely on specialty steel for clean rooms and chipmaking tools.

Analysts have already estimated this could increase Capex costs for US fabs by +2% to +4% in the coming quarters.

Immediately, equipment makers ( $Applied Materials(AMAT)$, $Lam Research(LRCX)$) and US-based foundries ( $Intel(INTC)$, $GLOBALFOUNDRIES Inc.(GFS)$ ) face margin pressures from higher steel costs. (see below)

Across the board, two stocks fell and two rose on Thursday:

  • Applied Materials: rose by +1.41% ($2.26) to $164.19.

  • Lam Research: fell by +0.17% ($0.14) to $84.19.

  • Intel Inc: fell by -1.28% (-$0.26) to $19.99.

  • GlobalFounderies: fell by -0.53% (-$0.20) to $37.51.

Thankfully, 3 of 4 stocks have recovered at the start of June 2025 due to positive market sentiments, except Intel Inc. Will the positive sentiments last ?

Countries Most Affected.

On a global scale, below are the Top 5 countries most affected by the latest tariffs announcement.

Freezing of Students’ Visa.

To add oil to fire, Trump administration has also ordered crackdown on international students—especially those from China and India.

Immediately, at least 270,000 student visa (issued to Chinese students) are at risk.

The latest crackdown also threatens talent pipeline for the US semiconductor industry.

With over 40% of US engineering PhDs held by foreign nationals, this policy shift could exacerbate the industry’s chronic talent shortages and slow innovation.

US Semiconductor Industry.

On Thursday, Nvidia - US bell weather for semiconductor and AI:

  • Fell by -1.362% to end 05 Jun 2025 at $139.99 per share.

  • Based on past 5 days’ performances, it was still up by +0.84% in June 2025.

  • Nvidia’s positive earnings momentum helped to stay afloat.

The prospect of US semiconductor industry is neutral to weak, if Trump insists on pursuing self-sufficiency for this critical sector, while suppressing exports to China. (see below)

Adhering to the president’s executive order means less money earned for the impending quarter.

US semiconductor stocks remain a high-conviction AI play, but June 2025 brings heightened policy and supply chain risks.

Investors should favor (1) diversified, (2) domestically anchored players and (3) closely monitor macro and political developments.

For now, it maybe best to sit out and let the feud between the two most egotistical men cool down first as market will continue to be volatile, just like the tempers of these two “adults”. Ha, ha.

It’s a new month and new set of Economic reports/ data out to test US market sentiments all over again.

Don’t miss out my other picked post for Friday - see below ! Remember to Repost & share so that more will come to know ok. Thanks.

Must ReadClick on below titles to accessRepost to share, Like as encouragement ok. Thanks.

  • Do you think US market will continue to pullback this week with the 25% steel tariffs enforced today, Wed, 04 Jun 2025 ?

  • Do you think semiconductor stocks will continue to be hammered by the latest steel & aluminium tariff policy ?

If you find this post interesting, give it wings! ️ Repost and share the insights ?

Do consider “Follow me” and get firsthand read of my daily new post. Thank you.

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# Nvidia & AMD: Who May Hit $200 First?

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  • Mortimer Arthur
    ·06-07
    TOP
    Should be a solid green week coming up. All the same fundamentals and sentiment that drove this week green, but without all the scheduled insider selling that was going on the past few days.
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    • JC888
      Hi, tks for reading my post and your predictions.  Seems true as of last Friday, 27 June, US market hit all time high for S&P 500 and Nasdaq.  Can't wait to see what's instore for this week.
      06-29
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  • $200 by end of Summer

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    • JC888
      Hi, thanks for reading and sharing.  Think NVDA will pull back this week ?  Lots hinges on US-China trade talk, I feel.

      Read my other posts yet ? Help Repost ok. Tks.
      https://ttm.financial/post/443625678532616
      https://ttm.financial/post/444076064039160
      06-09
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  • Venus Reade
    ·06-07
    TOP
    147.2 will be attacked and could be broken next week we shall see.
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    • JC888
      Hi, thanks for reading and sharing the price target.  With the possibility of US joining the Israel-Iran fray, it might be a volatile time for the US market... Hope commonsense prevail.  As the saying goes "three is a crowd"  no ?
      06-20
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  • The latest headline prediction was +75% by 2030. That sounds too small...

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    • JC888
      Hi, thanks for reading my post and your views.  As of last Friday, NVDA is higher at $157. Hope it gets to the +75% as soon... Haha
      06-29
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  • Blasting higher this summer.
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    • JC888
      Hi, thanks for reading.  Coming back to your view, it happened.  Nvidia is indeed higher as of last Friday, 27 June at $157 per share.
      06-29
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  • JC888
    ·06-06
    Hi, tks for reading my post. I make time to write & share.
    Pls "Re-post" so that more get to know. Tks! Rating is important (to me).
    Consider "Follow me" and get first hand read of my Daily new posts? Thanks!). Tks!!
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  • happygo
    ·06-06
    Exciting times ahead
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    • JC888
      Hi, tks for reading my post. My verdict is still in the bake. Economic reports are running contrary to the stk mkt, dunno what to make of it really... Living trading day by day... Haha
      06-07
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  • Yo Yo Sharemarket
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    • JC888
      Hi, thanks for reading my post. Hope you liked it. Care to "Follow me" and get first hand read of my daily new post/s, that are usually released in the morning - following a change in Tiger's post selection processing pattern... Haha.. Thanks.
      06-20
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  • VernaFred
    ·06-06
    Exciting outlook
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    • JC888
      Hi, tks for reading my post. R u concern about a falling US mkt due to inflation?
      06-09
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