Nvidia sales and profit hit records as videogame and server chips surge - Trade Stocks

Nvidia sales and profit hit records as videogame and server chips surge

By Wed, Nov 18, 2020

Nvidia Corp.’s quarterly results blew past estimates to record highs Wednesday, with sales surpassing $4 billion for the first time as the chip maker rolled out new gaming cards and data-center demand stayed hot.

Nvidia NVDA, +0.04% reported third-quarter net income of $1.34 billion, or $2.12 a share, compared with $899 million, or $1.45 a share, in the year-ago period. Adjusted earnings were $2.91 a share, compared with $1.78 a share in the year-ago quarter. Revenue soared to $4.73 billion from $3.01 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast earnings of $2.58 a share on revenue of $4.42 billion. Nvidia had forecast revenue of $4.31 billion to $4.49 billion.

Nvidia introduced new gaming chips in the quarter, based on a new design that was rolled out in its server chips the previous quarter, when data-center sales outperformed gaming sales for the first time ever. The rollout of new gaming cards in September flipped the momentum: Gaming sales surged 37% to a record $2.27 billion, while data-center sales soared 162% to $1.9 billion from the year-ago period, also a record high.

Analysts surveyed by FactSet had expected gaming sales of $2.06 billion. data-center sales of $1.84 billion.

“Nvidia is firing on all cylinders, achieving record revenues in gaming, data center and overall,” said Jensen Huang, Nvidia founder and chief executive, in a statement. “The new Nvidia GeForce RTX GPU provides our largest-ever generational leap and demand is overwhelming.”

For the fourth quarter, Nvidia looks to possibly set even more records, forecasting revenue of $4.7 billion to $4.9 billion, while analysts had forecast revenue of $4.4 billion on average.

Shares slid about 0.3% in after-hours trading, following a less than 0.1% uptick in the regular session to close at $537.15. Nvidia shares are up 128% for the year, while the PHLX Semiconductor Index  SOX, -0.72% has gained 37%, the S&P 500 index SPX, -1.15% rose 10%, and the Nasdaq Composite Index COMP, -0.82% advanced 32%.

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