Updated at 5:03 PM EST
Nvidia Corp. (NVDA) – Get a free reportOn Wednesday, it reported better-than-expected fiscal first-quarter earnings and a strong near-term sales forecast amid what it called “growing demand” for artificial intelligence and data center semiconductors.
Adjusted earnings for the three months ending in April came in at $1.09 a share, down 20% from the year-ago period, but well ahead of Wall Street’s forecast of 92 cents.
Nvidia said the group’s revenue fell 13% from a year earlier to $7.19 billion, but that number beat analysts’ estimates of $6.52 billion.
Nvidia said data center revenue reached a record $4.28 billion, an increase of 14%, “led by growing demand for generative AI and large language models using GPUs based on NVIDIA Hopper and Ampere architectures.”
Revenue from gaming chips — which are also used to mine cryptocurrency — fell 38% to $2.24 billion, a move Nvidia said reflects “weak demand due to slowing macroeconomics and lower shipments to normalize channel inventory levels.”
Nvidia’s revenue forecast ahead of expectations
Looking at the current quarter, Nvidia expects revenue of about $11 billion, plus or minus 2%, compared to the Wall Street consensus of $7.15 billion.
“The computer industry is going through two simultaneous phases—accelerated computing and generative artificial intelligence,” CEO Jensen Huang said in a statement.
“A trillion dollars of proven global data center infrastructure will move from general-purpose computing to accelerated computing as companies race to apply generative AI into every product, service, and business process.”
He added, “We have a full suite of data center products — H100, Grace CPU, Grace Hopper Superchip, NVLink, Quantum 400 InfiniBand, BlueField-3 DPU — in production.” they.”
Nvidia shares were ticked up 21.5% in after-hours trading immediately after the earnings release to indicate Thursday’s opening bell price of $371.05 per share. The move would extend the stock’s year-to-date gains to about 151%.
Nvidia’s view of artificial intelligence is likely to be a key investor focus after Huang’s suggestion that Nvidia’s new AI “supercomputer,” known as Nvidia DGX, could position the company as a leader in a market that could be valued at more than $600 billion.
Management consultant Gartner predicts that so-called generative AI will account for about 10% of all data produced by 2025, up from just 1% in 2021.
Analysts at KGI see this adding between $5 billion and $6 billion to Nvidia’s revenue within the next three years.
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