Nvidia data center sales grew 55% on demand for artificial intelligence chips

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  • Nvidia reported third fiscal quarter earnings after the bell on Wednesday.
  • Nvidia stock has had a massive run over the past year, with shares up more than 123% year-over-year so far.

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Nvidia stock rose more than 3% on Wednesday after it reported earnings for its third fiscal quarter, which beat both earnings and sales expectations.

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The company also issued a bullish forecast for revenue for the current quarter ending January.

Here’s how it fared against Refinitiv’s consensus expectations for the quarter ended October 31:

  • Income: $1.17, adjusted, versus $1.11 expected, 60% year-over-year
  • Revenue: $7.10 billion, versus expected $6.82 billion, up 50% year-over-year
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Nvidia said it expects to report about $7.4 billion in the current quarter ending January, which exceeded analysts’ expectations of $6.86 billion.

Nvidia stock is trending massively with more than 124% of the shares so far. The company’s demand is higher than it can fill, especially for its hard-to-find GeForce graphics cards, which have been popular with gamers.

The company is also making significant gains in data centers, where cloud providers and large enterprises are increasingly turning to graphics processors made by Nvidia for artificial intelligence applications.

Nvidia reported $2.9 billion in data center sales, up 55% from $1.9 billion in the same quarter last year. Nvidia CFO Colette Kress wrote that the growth was driven by GPU sales for “hyperscale customers,” an industry term used to refer to cloud providers such as Amazon AWS, Microsoft Azure and Google Cloud.

Kress said customers were using the chips for tasks such as crunching data to understand human speech and offering customers recommendations.

Nvidia’s biggest market, gaming, reported sales of $3.2 billion, up 42% from $2.27 billion in the same quarter last year. The company said this was primarily due to increased sales of its GeForce consumer graphics processors.

Nvidia’s gaming graphics cards now have software that prevents them from being used for cryptocurrency mining, the company said. Nvidia introduced dedicated graphics cards for crypto mining earlier this year to help meet some of the demands. Nvidia said it sold $105 million in cryptocurrency-specific graphics cards, down from $266 million in the quarter ended August.

Nvidia’s automotive business remains a small part of its sales, even as rival chipmakers invest heavily in the hope that it will become a multi-billion dollar market over the next decade.

Nvidia said automotive sales were $135 million, up 8% year over year, but down 11% from the previous quarter. Nvidia said the gradual decline was because automakers had other supply constraints, but self-driving programs using its processors continue to accelerate.

Nvidia’s professional visualization product line grew 144% annually to $577 million. That business is primarily high-end graphics processors for professionals, and has benefited as firms have purchased powerful laptop workstations for their employees to use at home.

Last week, Nvidia CEO Jensen Huango suggested The company may be one of the main suppliers to technology companies building “metaverses,” or a virtual world that some believe will be home to an increasing amount of commerce, entertainment and advertising. Nvidia also introduced new software products called “Omniverse Enterprise” that can be used to create virtual characters, interpret speech, and create new 3D worlds.

Nvidia is in the process of buying Arm, a British vendor for Core mobile semiconductor technology. The European Commission launched a thorough investigation into the transaction last month.

In his filing on Wednesday, CFO Kress said the US FTC had expressed concerns about the transaction, and the company was in talks with the regulator to address those concerns.

The company said in its third-quarter earnings report, “While regulators and some Arm licensees have expressed concerns or objections to the transaction, we continue to believe in the merits and benefits of the acquisition of Arm, its licensees and the industry.” keep.”

Nvidia said it paid $100 million in dividends during the quarter.

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