Nvidia surprises Wall Street

@ 2020/05/23
Data centres prop up second quarter

Nvidia forecast second-quarter revenue above analysts’ estimates, as demand surges for its chips used in the data centres that power the shift to working remotely because of the new coronavirus outbreak.

The company said the forecast includes a contribution from its $6.9 billion purchase of Israeli chip firm Mellanox Technologies Ltd, which strengthened its data centre business.

The chipmaker said it expects current quarter revenue of $3.65 billion, plus or minus two percent, while the cocaine nose jobs of Wall Street were expecting about $3.29 billion.

Nvidia recorded a jump in demand for data centre chips as companies invested to strengthen their IT infrastructure to support employees working remotely. Nvidia said that sales to cloud computing companies drove its data centre results.

Revenue rose 39 percent to $3.08 billion in the first quarter ended April 26, with the data centre business recording its first $1 billion quarter, the company said. Nvidia’s data centre business hit $1.14 billion, up 80 percent from a year earlier. The segment beat analyst estimates of $1.07 billion.

Some of Nvidia’s market segments were hurt by the pandemic. The company expects sales to automotive customers to fall 40 per cent next quarter.

Nvidia CEO Jensen Huang said in an interview that some of those companies were also investing in robotics for the future, with Nvidia supplying the chips.

“The manufacturing companies are impacted, but they’re racing to work on robotics technology so they can be less impacted in the future”, Huang said.

Nvidia’s net income rose to $917 million from $394 milliona year earlier.

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