May 23, 2024

Brighton Journal

Complete News World

Nvidia Beats earnings. The arrow goes up.

Nvidia Beats earnings.  The arrow goes up.

Nvidia provided revenue forecasts for the July quarter that were well above expectations, citing growing demand for its chips that enable artificial intelligence applications.

Its shares rose in after-hours trading.

The semiconductor company reported adjusted earnings per share in the April quarter of $1.09, compared to Wall Street’s estimate of 92 cents, according to FactSet. Revenue came in at $7.2 billion, better than analysts’ expectations of $6.5 billion. For the quarter, gaming revenue was down 38% from a year ago, but data center segment sales were up 14% thanks to demand from artificial intelligence.

The big news was the expectations. For the current quarter, Nvidia gave a revenue forecast range of $11 billion for the midstream, well above the analyst consensus of $7.2 billion.

Nvidia shares rose 24% to $378 after the release.

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“The computer industry is undergoing two simultaneous transformations – accelerated computing and generative artificial intelligence,” Nvidia CEO Jensen Huang said in a press release. “Our entire data center product suite — the H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand, and BlueField-3 DPU — are in production. We are significantly increasing our supply to meet the growing demand for them.”

These products are used to power the latest AI applications that have excited investors and consumers alike.

Nvidia is a leading manufacturer of chips used in video games, artificial intelligence, and cloud computing applications within PC and server hardware.

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The company’s chips have significant exposure to generative AI, which has been trending this year. Technology ingests text, images, and videos in a brutal way to create content. Interest in this form of artificial intelligence began with OpenAI’s release of ChatGPT late last year.

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In a conference call with investors and analysts, Nvidia management said they saw widespread demand for generative AI projects from cloud computing providers, large consumer Internet companies, startups, and enterprises. The company also said it had purchased “significantly larger” supply commitments from its suppliers for the second half of the fiscal year to meet higher demand, compared to the first half.

In a telephone interview with Barron After the call, Chief Financial Officer Colette Kress said order visibility improved during the quarter. She said customers give Nvidia their long-term plans as they build new data centers.

Announcement – scroll to continue

Wall Street analysts have a positive view of Nvidia. About 74% have Buy or Neutral ratings on the stock, according to FactSet.

Nvidia stock is up more than 100% so far this year and nearly 90% over the past 12 months.

Write to Tae Kim at [email protected]