Nvidia sales hit records again amid chip shortage, and earnings outlook suggests more to come – MarketWatch
Nvidia Corp. broke several quarterly sales records and forecast revenue growth as much as $1 billion above Wall Street estimates for the current quarter Wednesday, as the gaming and data-center chip company faces continued demand amid a chip shortage.
For the fiscal second, or current, quarter, Nvidia NVDA,
forecast revenue of $6.17 billion to $6.43 billion, while analysts surveyed by FactSet have forecast revenue of $5.47 billion on average.
“In our data-center business, right now our product lineup couldn’t be better,” said Colette Kress, Nvidia’s chief financial officer, when prompted by analysts on a conference call to elaborate on the outlook. “We have a strong overall portfolio, both for training and for inferencing, and we’re seeing strong demand across our hyperscales and vertical industries.”
“We’ve made a deliberate effort on the gaming perspective to supply to our gamers the cards that they would like given the strong demand that we see,” Kress said. “So that will also support the sequential growth that we’re receiving.”
In the fiscal first quarter, gaming sales rallied 106% to a record $2.76 billion, surpassing the previous high mark of $2.5 billion, while analysts surveyed by FactSet had expected Nvidia gaming sales of $2.72 billion.
“We expect to remain supply-constrained into the second half of the year,” Kress said.
To address that short supply, Nvidia has worked to deter cryptocurrency miners from using its gaming chips for mining rigs. Early in the first quarter, the company launched a chip designed for cryptocurrency mining; sales of the so-called CMP chips came in at $155 million.
On the whole, Nvidia reported first-quarter net income of $1.91 billion, or $3.03 a share, compared with $917 million, or $1.47 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $3.66 a share, compared with $1.80 a share in the year-ago period.
Analysts had estimated adjusted earnings of $3.29 a share on revenue of $5.4 billion. Shares fluctuated between slight gains and declines after hours, and dipped as much as 2% during the conference call. That followed a 0.3% rise in the regular session to close at $628.
On the data-center side, sales surged 79% to a record $2.05 billion from the year-ago period, while analysts expected sales of $2 billion.
“We’re seeing strength across the board in data centers and we’re seeing strengthening demand,” said Chief Executive Jensen Huang on the conference call. “From scientific computing, both physical and life sciences, data analytics and classical machine learning, cloud computing and cloud graphics — which is becoming more important because of remote work — and very importantly AI, both for training as well as a inferencing for classical machine-learning models.”
“On our Arm acquisition, we are making steady progress in working with the regulators across key regions,” Kress said. “We remain on track to close the transaction within our original timeframe of early 2022.”