Greg Newman discusses Nvidia
Nvidia Corp., the largest U.S. chipmaker by market value, gave a bullish forecast on demand for chips used in gaming PCs and data centers.
Revenue in the current quarter will be about US$6.3 billion, plus or minus 2 per cent, the Santa Clara, California-based company said in a statement late Wednesday. The adjusted gross margin, or the percentage of revenue left after deducting costs, will be 66.5 per cent, the company said. The sales prediction compares with a US$5.49 billion average analyst estimate, according to data compiled by Bloomberg.
Founder and Chief Executive Officer Jensen Huang has drawn investors to his company’s stock by persuading owners of data centers that are the backbone of the internet that his graphics chips are key to artificial-intelligence-based computing.
That’s caused a surge in revenue that some investors are now concerned has peaked.
Nvidia is one of the pioneers of outsourcing production and has never owned its own factories. Like its peers and rivals it’s dependent on Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. for manufacturing at a time when the whole industry is experiencing a spike in demand as parts of the world economy emerge from the depths of the pandemic. Nvidia has said shortages have constrained its growth.Fiscal first-quarter revenue rose 84 per cent to US$5.66 billion and profit excluding certain costs was US$3.66 a share in the period, which ended May 2, the company said. Analysts, on average, predicted earnings of US$3.31 a share on sales of US$5.41 billion.
Nvidia reported data center chip sales rose 79 per cent to US$2.05 billion in the fiscal first quarter from a year earlier. Revenue from gaming doubled to US$2.76 billion in the quarter.The stock was down less than 1 per cent in extended trading following the announcement. It closed at US$628 in New York Wednesday, leaving it up 20 per cent in 2021. Last week Nvidia announced that it will split its stock 4 for 1 to try to accessible to investors and employees.