(Businesshala) – Nvidia Corp on Wednesday forecast fourth-quarter revenue above analysts’ expectations, betting on growth in its data center business as more Internet companies prepare to invest in artificial intelligence and the metaverse.
The online arena that uses augmented and virtual reality to help users interact has garnered more attention after Facebook, now named Meta, said it would boost capital spending and support its Social media will divert attention from business.
The move will be a big boost for Nvidia as metaverse applications will require more computing power and drive demand for the chips.
The company released Omniverse Enterprise here last month to build powerful computing systems with its chips for corporate customers starting at $9,000 per year.
“We showed what is possible when we can jump into the virtual world. … this is just the tip of the iceberg of what’s to come,” Chief Executive Officer Jensen Huang said in the earnings release.
The pandemic spurred demand for Nvidia’s graphic chips used in gaming consoles and computers as consumers staying at home spent more time playing video games with the support of cryptocurrency miners. The company is also benefiting from recent efforts such as artificial intelligence chips used in data centers and for autonomous vehicles.
The world’s largest maker of graphics and AI chips expects current quarter revenue of $7.40 billion, plus or minus 2%, higher than analysts’ average estimate of $6.86 billion, according to Refinitiv’s IBES data.
After more than doubling this year, the company’s shares were up nearly 4% in extended trading.
For the reported third quarter, revenue in Nvidia’s gaming unit rose 42% to $3.22 billion and data centers rose 55% to $2.94 billion.
According to FactSet, analysts had expected $3.13 billion and $2.75 billion for gaming and data centers, respectively.
Overall, revenue rose nearly 50% to $7.10 billion for the three months ended October 31, according to IBES data from Refinitiv, which exceeded the average estimate of $6.83 billion.