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Nvidia’s forecast tops expectations in online sales, despite the feline corona virus hit

(Reuters) – Nvidia Corp (NVDA.O) on Thursday forecast first-quarter revenue that topped Wall Street’s expectations, fueled by sales of the chips, cloud computing providers, even as it projected a $100 million hit of the corona virus outbreak.

FILE PHOTO, the nVIDIA booth will be shown at E3 2017 And the Electronic Entertainment Expo in Los Angeles, California, USA, June 13, 2017. REUTERS/ Mike Blake

The forecast reinforced expectations of a rebound in chip demand, and sent Nvidia’s shares are up nearly 7% in extended trading. Last month, Intel Corp. (a). (INTC.(O) and Advanced Micro Devices Inc. (AMD.(O), Nvidia’s primary competitors in the sale of the team and for data center customers, both forecast improvements in the marketplace.

Nvidia is the second chipmaker after Qualcomm Inc (QCOM.(O) to warn you of a potential impact on the company’s business due to the corona virus outbreak.

Nvidia’s biggest market is in the chips, the improvement of graphics in video games that can be played on Pc’s and laptops. However, in the past few years, the company has expanded to sales in the data center and cloud computing services to customers, as the chips are becoming more and more the power of artificial intelligence tasks, such as face recognition and speech recognition.

Revenue from Nvidia’s closely monitored in the data center, the chips business rose 42.6% to $968 million, in the fiscal fourth quarter, beating the analysts ‘ estimate of $829 million, according to research firm FactSet.

Nvidia doesn’t have the name of the major customers, however, said that the “hyperscale” customers, the reed, the higher the data-center sales, a group of industry analysts is often defined as a major cloud-computing providers, such as the Alphabet, Inc. ‘ s (GOOGL.D) Google Amazon.com’s (AMZN.(O) unit, the cloud, and Microsoft Corp’s (MSFT.R), among others.

The Santa Clara, Calif. – based company said it expects current-quarter revenue of about $3 billion, plus or minus 2%, the midpoint of which is above analysts ‘ expectations of $2.86 billion, according to IBES data, Refinitiv. The company said that the full impact of the corona virus outbreak in China, a crucial market for both the online and the data center is-chips, it was still not clear, however, that the reduction in sales outlook by $100 million in in in response.

“We had expected a weaker outlook for the April quarter, and if Nvidia has a very high gaming GPU sales exposure in China,” he said Kinngai Channel of the Top Insights with the Group. “We believe that the continued strength in Nvidia’s data center the business is in a position to be partially offset by weak consumer gaming business in China, because of the corona virus outbreak.”

The sales of the online business, continued to be the largest contributor to revenue, rose by 56% to $1.49 billion, but fell short of analysts ‘ estimate of $1.52 billion, according to FactSet.

The total sales for the quarter increased approximately 41% to $3.11 billion, above the analysts ‘ estimate of $2.97 billion, according to IBES data, Refinitiv.

Nvidia’s net income increased to $950 million, or $1.53 per diluted share, in the fiscal fourth quarter, which ended Jan. 26, from $ 567 million, or 92 cents a share, a year earlier.

With the exception of the items, it earned $1.89 per diluted share, above estimates of $1.69.

Reporting Amal in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila and Leslie Adler

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