Nvidia sales increased 55% on demand for AI chips

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Nvidia stock surged more than 5.1% in extended trading after Wednesday’s earnings report for its third fiscal quarter beating expectations for sales and earnings.

The company also published an optimistic forecast for revenue in the current quarter that ends in January.

 

Here’s how it did versus expectations for the quarter ending in October:

  • Earnings: $1.18, adjusted, versus $1.10 expected, up more than 60% year over year
  • Revenue: $7.11 billion versus $6.81 billion expected, up more than 50% year over year

Nvidia stated that it expects to report approximately $7.5 billion in the current quarter (which ends in January). The company’s expectations seem higher than analyst expectations of $6.87 billion.

Nvidia stock shares were up more than 125% year to date. The company has had more increased demand than it can actually produce. It experienced shortages, especially with its GeForce graphics cards (popular with gamers).

The company made notable gains in data centers. Big enterprises and cloud providers use Nvidia’s graphics processors for AI applications.

Nvidia reported around $2.8 billion in data center sales, which is up 55% from $1.8 billion in the same quarter in 2020. Nvidia CFO Colette Kress stated that GPU sales drove high-scale customers such as AWS (Amazon), Azure (Microsoft), and Cloud (Google).

Kress said that customers use their chips to understand human speech and test data to offer customer recommendations.

Nvidia’s reports

Gaming, the biggest market for Nvidia, announced its earnings of $3.3 billion in sales, up 43% from $2.26 billion in the same quarter in 2020. The company commented on this saying it was mainly because of boosted sales of its GeForce consumer graphics processors. However, the supply remained limited.

The company said that its gaming graphics cards now come with software that makes it impossible to use in crypto mining. However, this year, Nvidia introduced graphics cards specially designed for crypto mining in order to support meeting some of the demand. It sold crypto-specific graphics cards worth $107 million, down from $267 million in the previous quarter that ended in August this year.

Nvidia said automotive sales equaled $136 million, up 9% annually but 12% down from the prior quarter.

The company’s professional visualization product line increased 145% annually to $578 million.

Several weeks ago, Jensen Huang, Nvidia CEO, said that the company might be one of the leading suppliers for tech companies in terms of creating a virtual world (metaverse).

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