FILE PHOTO: The logo of Nvidia Corporation is seen during the annual Computex computer trade show in Taipei, Taiwan, May 30, 2017. REUTERS/Tyrone Siu/File Photo
(Reuters) – Nvidia Corp reported a better-than-expected quarterly profit and forecast second-quarter revenue above analysts’ estimates, boosted by higher demand for its chips, sending its shares up 6% in the extended trade.
Nvidia has entered into newer growth areas such as data centres, artificial intelligence and self-driving cars if it looks outside the bread-and-butter business of selling chips that the video-game graphics.
The company has grown at a fast pace in the past few years, but a slowdown in China and the trade tensions were expected to weigh on its operations.
“Despite the short-term pause in demand from hyperscale customers, the application of AI continues to accelerate,” said Chief Executive Officer, Jensen Huang.
The company forecast revenue of $2.55 billion, plus or minus 2% for the quarter, above analysts ‘ expectations of $2.53 billion, according to the IBES data of Refinitiv.
The positive forecast allayed investors ‘ concerns about the slow data center demand, which was marked by larger rival Intel Corp.
Nvidia’s net profit fell to $394 million, or 64 cents per share, in the first quarter ended April 28 of $1.24 billion, or $1.98 per share, a year earlier.
Excluding items, Nvidia earned 88 cents per share, while analysts had expected a profit of 81 cents per share. The total revenue decreased to $2.22 billion, but was still above analysts’ estimates of $ 2.20 billion.
Reporting by Sayanti Chakraborty in Bengaluru; Editing by Anil D’silva