Wall Street analysts expect Nvidia’s Q1 earnings on Wednesday (after the bell) to be “messy” and include disappointments on key metrics.

However, the expected near-term weakness is hardly a reason to bail on NVDA shares – they’re telling clients heading into the company’s release.

Note that Nvidia stock has already rallied some 45% in less than two months.

US export regulations to weigh on Nvidia’s Q1 earnings

Street has muted expectations for Nvidia’s first-quarter as the AI darling is caught in the crosshairs of rising trade tensions between the US and China.

The multinational has already announced that tightened export restrictions on its H20 chip under the Trump administration are making it lose market share in China and will result in a $5.5 billion charge in its fiscal Q1.

Plus, the financial consequences of those restrictions in their entirety will only unravel over time. So, NVDA could resort to a cautious guidance on Wednesday as well.

That said, Nvidia shares remain worth owning for the long term, particularly if “the management is convincing that supply of racks and non-rack Blackwell is improving, and that there’s potential for H2 acceleration,” said Joseph Moore – a Morgan Stanley analyst in a report this week.  

AI demand could push NVDA shares up in the second half of 2025

Long-term investors should look past the upcoming quarterly release because Google announced a series of artificial intelligence initiatives at its I/O developer conference earlier this month.

Additionally, San Francisco based Anthropic has recently launched “Claude 4” – its latest and most advanced AI model to date.

Together, these developments signal continued demand for Nvidia products, argued BofA analysts in their recent note, adding “if you can’t see the usage/adoption of AI has hit an explosive inflection in the past two months … I don’t know what to tell you.”

Despite a sharp rally in recent weeks, NVDA stock is down some 10% versus its year-to-date high.

Nvidia remains committed to removing the China overhang

Investors should also focus on recent reports that Nvidia could soon launch a toned-down version of its most-popular Blackwell chip to bypass export restrictions and resume business in China.

If these rumours prove true, NVDA shares will likely respond with a big move to the upside.

That’s part of the reason why Piper Sandler analysts also recommend that investors “weather the uncertainty” and remain invested in this AI stock ahead of its Q1 earnings release.

Expectations are for Nvidia to report per-share earnings of 80 cents for its first quarter today, up some 38% on a year-over-year basis.

Heading into the quarterly update, Wall Street has a consensus “buy” rating on Nvidia stock with the average price target of about $163 indicating a potential upside of more than 20% from current levels.  

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Australia has granted approval to Woodside Energy’s proposal to extend the operational lifespan of its North West Shelf gas plant until the year 2070. 

This decision comes after an extensive six-year review process that was marked by considerable delays, multiple appeals, and strong opposition from environmental organisations, Reuters said in a report. 

The approval allows the continuation of operations at the significant natural gas facility located off the coast of Western Australia for an additional period, extending its initial planned decommissioning date. 

Review process

Woodside Energy, a major Australian petroleum and natural gas company, sought the extension for its flagship North West Shelf project, which has been a key supplier of liquefied natural gas (LNG) to global markets for decades. 

The lengthy review process involved rigorous environmental impact assessments and consideration of stakeholder concerns, including those raised by green groups who voiced concerns about the project’s long-term environmental implications and its contribution to greenhouse gas emissions. 

Despite these objections, the government ultimately sided with Woodside Energy, paving the way for continued gas production and export from the North West Shelf well into the latter half of the 21st century. 

The extension is expected to have significant implications for Australia’s energy sector, LNG exports, and its efforts to meet emissions reduction targets.

Located on Western Australia’s Burrup Peninsula, the North West Shelf facility stands as Australia’s largest and oldest liquefied natural gas plant, playing a crucial role in supplying Asian markets.

Environmental concerns

Environment Minister Murray Watt said in a statement that the approval for the project extension would include stringent conditions, especially concerning the impact of air emission levels.

Following the announcement, Woodside shares experienced a 4% surge in the afternoon, building on gains made throughout the trading day.

The current project approval is scheduled to expire in 2030.

Woodside submitted its extension application in 2018, which became subject to both state and federal reviews. This was due to conflicting priorities concerning energy security and the project’s environmental consequences.

Australia’s leading gas producer, Woodside, is establishing the foundation to connect new gas fields to its LNG plant through this extension. This development is projected to release as much as 4.3 billion metric tons of carbon emissions throughout its operational lifespan.

Government decision and partnerships

The Western Australia state government granted approval for the contentious project in December, a decision reached after an extensive review process that included the consideration of approximately 800 appeals submitted by environmental activists and concerned citizens. 

The sheer volume of appeals underscored the significant public interest and debate surrounding the proposed development. 

Prior to the federal general election held in May, the federal government exhibited a cautious approach to the project, twice postponing its final decision. 

Faced with declining production from its original offshore gas fields in the North West Shelf, a decades-long extension allows Woodside to proceed with the development of its long-dormant Browse offshore project, which will supply gas to the Karratha plant.

The North West Shelf venture is a partnership that includes Woodside and the following companies: BP, Chevron, Shell, Japan’s Mitsui & Co and Mitsubishi Corp, and China’s CNOOC.

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Elon Musk has publicly expressed his disapproval of President Donald Trump’s recently passed House tax bill, a sweeping piece of legislation that the billionaire entrepreneur says runs contrary to his own efforts to curtail government spending.

Musk’s critique adds a high-profile voice to the growing chorus of concerns surrounding the bill’s fiscal impact.

In an interview with CBS News, an excerpt of which was released Tuesday night, Musk, who recently announced he is stepping back from his role in the Department of Government Efficiency (DOGE)—a body that quickly became emblematic of the second Trump administration’s cost-cutting vision—did not mince words.

He stated he was “disappointed to see the massive spending bill, frankly, which increases the budget deficit, not just decreases it, and undermines the work that the DOGE team is doing.”

The full interview is scheduled to be broadcast on CBS Sunday Morning this weekend.

The legislation in question, frequently referred to by President Trump as his “big, beautiful bill,” encompasses a wide array of tax cuts.

Having narrowly passed the US House of Representatives last week, it now heads to the Senate for further deliberation.

Musk, the prominent chief executive officer of Tesla Inc. and SpaceX, appeared to align his concerns with those of some Republican lawmakers in both the House and Senate.

These legislators argue that the bill’s price tag is too high and are demanding more significant reductions in government spending to offset its cost.

Echoes of fiscal conservatism and legislative hurdles

The sentiment expressed by Musk mirrors the fiscal conservatism voiced by certain Republican factions.

Senator Ron Johnson, a Republican from Wisconsin, highlighted the considerable distance yet to be covered before the bill might find acceptance in the upper chamber.

When asked about a timeline for the Senate’s work, Johnson remarked, “We are so far away from an acceptable bill, it’s hard to say.”

However, the legislative path forward is complicated not only by calls for further cuts but also by opposition from other Republicans to existing provisions within the House version.

Some object to measures such as restrictions on Medicaid benefits and the proposed swift elimination of clean-energy tax incentives, indicating a challenging road ahead for the bill in the Senate.

Musk, offering his personal take on the ambitious legislation during the CBS interview, quipped, “I think a bill can be big or it can be beautiful, but I don’t know if it can be both. My personal opinion.”

This pithy remark encapsulates the tension between the bill’s expansive scope and its potential fiscal consequences.

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European stock markets exhibited a cautious and mixed start to Wednesday’s trading session, with the pan-European Stoxx 600 index hovering near flat territory as investors braced for a significant influx of economic data from across the continent.

Currency markets saw both the British pound and the euro soften against the US dollar, while global attention turned towards upcoming US Federal Reserve meeting minutes and highly anticipated earnings from chip giant Nvidia.

Shortly after the opening bell, the pan-European Stoxx 600 was trading flat, reflecting a general lack of strong directional conviction among investors.

National bourses showed slight variations: London’s FTSE 100 and the French CAC 40 were marginally higher, indicating a touch of resilience.

Germany’s DAX, which had impressively scaled a record high in Tuesday’s session, was trading around 0.1% higher, suggesting it was holding onto its recent strong gains.

This tentative market mood comes as participants anticipate a swathe of economic indicators due for release throughout the day.

Key data points include German import prices, final French gross domestic product (GDP) figures, employment data from both France and Germany, and an update on Turkish economic confidence.

These releases will provide further insights into the health and trajectory of the European economy.

Currency watch: pound and euro dip against dollar

In foreign exchange markets, the British pound was trading 0.2% lower against the US dollar on Wednesday morning.

This movement put sterling on track for its second consecutive day of losses versus the greenback, though it’s important to note that the pound has still appreciated by a significant 7.7% against the dollar year-to-date.

Similarly, the euro was also trading 0.2% lower against the US currency, potentially extending its losses for a second day.

Despite this recent dip, the euro has recorded a gain of more than 9% against the US dollar since the beginning of the year.

Global focus: Fed minutes and Nvidia’s numbers awaited

Global investors are keenly awaiting the release of minutes from the US Federal Reserve’s May meeting, which are due later on Wednesday.

These minutes will be scrutinized for any fresh clues regarding the central bank’s thinking on inflation, interest rates, and the overall economic outlook.

While no major corporate earnings were expected out of Europe on Wednesday, market participants on both sides of the Atlantic are closely monitoring the upcoming earnings report from US chipmaking behemoth Nvidia.

The company’s results, due after Wall Street’s closing bell, are widely seen as a key barometer for the tech sector and broader market sentiment.

Asia-Pacific recap and US market cues

The trading backdrop from the Asia-Pacific region was mixed on Wednesday.

Japan’s Nikkei 225 was last seen trading 0.3% higher, while South Korea’s Kospi added a more substantial 1.8%.

However, Australia’s S&P/ASX 200 shed 0.2% after the country reported a higher-than-expected rise in inflation.

Hong Kong’s Hang Seng index was also down 0.4%.

On Wall Street, stock futures were flat ahead of Wednesday’s trading session.

This followed broad gains on Tuesday, as investors reacted positively to US President Donald Trump’s decision to pause the implementation of 50% tariffs on European Union imports, a development that markets absorbed as they reopened after the Memorial Day holiday.

German import prices show unexpected contraction

Adding to the day’s economic narrative, fresh data from Germany revealed an unexpected development in import prices.

Figures from the Federal Statistical Office showed that German import prices fell by 0.4% year-on-year in April.

This was a surprise, as analysts polled by LSEG data had been anticipating an annual rise of 0.2%.

The previous month, March, had seen import prices in Germany rise by 2.1%, making the April contraction particularly noteworthy.

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The national water regulator Ofwat has imposed a record £122.7 million penalty on Thames Water following two separate investigations into the company’s operations and dividend practices.

The fine, which is the largest ever issued by the regulator, includes £104.5 million for serious failings in the company’s wastewater management and a further £18.2 million for breaching rules around dividend payments.

Ofwat said the penalties were a response to “unacceptable” damage caused to the environment and customers, marking the first time it has fined a company over paying dividends regardless of performance.

Thames Water found guilty of failures in wastewater ops, and improper dividend payouts

The most serious penalty, amounting to £104.5 million, relates to multiple breaches connected to Thames Water’s wastewater operations.

The regulator found the company failed to properly build, maintain, and operate essential infrastructure, which led to repeated pollution incidents and service failures.

In addition, Ofwat imposed an £18.2 million fine for improper dividend payments made in October 2023 and March 2024.

The watchdog ruled that £37.5 million in interim dividends and a further £131.3 million paid to Thames Water Utilities Holdings Limited were in violation of regulatory guidelines.

The regulator highlighted that these payments were made despite the company being in significant financial difficulty, with Ofwat now placing Thames Water in a “cash lock up,” prohibiting further dividends without regulatory approval.

Significance of the penalty

Ofwat’s chief executive, David Black, strongly criticised the company’s conduct. “This is a clear-cut case where Thames Water has let down its customers and failed to protect the environment,” he said.

Our investigation has uncovered a series of failures by the company to build, maintain and operate adequate infrastructure to meet its obligations.

Black added that Thames Water failed to propose any adequate redress package to address the environmental harm caused, leaving Ofwat no option but to impose significant financial penalties.

In response, a spokesperson for Thames Water stated the company “takes its responsibility towards the environment very seriously,” and noted that efforts are already underway to address storm overflow issues highlighted in the investigations.

They also defended the dividend payments, citing a review of the firm’s legal and regulatory obligations.

Environment secretary Steve Reed the government has launched the toughest crackdown on water companies in history.

“Last week we announced a record 81 criminal investigations have been launched into water companies. Today Ofwat announce the largest fine ever handed to a water company in history,” he said.

The era of profiting from failure is over. The Government is cleaning up our rivers, lakes and seas for good.

Mounting debt and risk of nationalisation continue to loom

The fines come as Thames Water struggles to remain solvent amid soaring debt, operational issues, and growing public scrutiny.

The company, which serves 16 million people across London and southern England, narrowly avoided de facto nationalisation earlier this year after securing a £3 billion emergency loan in February.

That deal allowed the company to continue operating for at least another year, giving it time to restructure its nearly £20 billion in debt.

However, the newly announced fines were not included in its financial planning for the next regulatory period, casting fresh doubt on its financial future.

The firm, which employs around 8,000 people and is responsible for supplying water to about a quarter of the UK’s population, had been forecast to run out of funds by March.

The emergency loan staved off immediate collapse, but some lenders opposed its terms, while critics, including Liberal Democrat MP Charlie Maynard, argued the loan was not in the public interest.

Customers are set to face a 31% rise in water bills from April.

Ofwat has clarified that the penalties announced this week will not impact customer bills.

As pressure mounts to clean up its operations and win back public trust, Thames Water must now balance financial survival with an urgent need to fix long-standing infrastructure issues and avoid further environmental damage.

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