Nvidia shares jumped after the computer company posted stronger-than-expected earnings.
Nvidia Corp. shares powered higher Thursday after the gaming and datacentre chipmaker posted stronger-than-expected second quarter earnings that offset concerns for the fate of its $40-billion (U.S.) takeover of Britain’s ARM Ltd.
Nvidia said current-quarter revenue should rise to around $6.8 billion, with a range of plus or minus two per cent, and gross margins of around 65.2 per cent, plus or minus 30 basis points. Second quarter earnings included a bottom line beat of $1.04 per share on sales of $6.51 billion.
Gaming chips brought in $3.06 billion in sales, Nvidia said, while its thriving datacentre business generated revenue of $2.37 billion, both of which beat analysts’ forecast.
“We expect another strong quarter with sequential growth driven largely by accelerating demand in data centre. In addition, we expect sequential growth in each of our three other market platforms,” CFO Colette Kress told investors on a conference call late Wednesday. “Gaming demand is continuing to exceed supply as we expect channel inventories to remain below target levels as we exit Q3.”
“Nvidia posted strong beat and raise results lead by strong data centre and pro visualization revenues. Data centre strength was driven by both cloud and vertical industries (enterprise),” said KeyBanc Capital Markets analyst John Vinh, who lifted his price target on the stock to $245, with an “overweight” rating, following last night’s earnings report.