Nvidia shares spike 26% on huge forecast beat driven by A.I. chip demand

Nvidia

reported
first-quarter
earnings
for
its
fiscal
2024
on
Wednesday,
with
a
stronger-than-expected
forecast
that
drove
shares
up
26%
in
extended
trading.

Here’s
how
the
company
did
versus
Refinitiv
consensus
estimates
for
the
quarter
ended
in
April:

• 
  EPS:
  $1.09,
  adjusted,
  versus
  92
  cents
  expected
• 
  Revenue:
  $7.19
  billion,
  versus
  $6.52
  billion
  expected

Nvidia
said
it
expected
sales
of
about
$11
billion,
plus
or
minus
2%,
in
the
current
quarter,
more
than
50%
higher
than
Wall
Street
estimates
of
$7.15
billion.

Prior
to
the
after-hours
move,
Nvidia
stock
was
up
109%
so
far
in
2023,
mostly
driven
by
optimism
stemming
from
the
company’s
leading
position
in
the
market
for
artificial
intelligence
chips.
Nvidia
CEO
Jensen
Huang
said
the
company
was
seeing
“surging
demand”
for
its
data
center
products.

Nvidia’s
data
center
group
reported
$4.28
billion
in
sales,
versus
expectations
of
$3.9
billion,
a
14%
annual
increase.
Nvidia
said
that
performance
was
driven
by
demand
for
its
GPU
chips
from
cloud
vendors
as
well
as
large
consumer
internet
companies,
which
use
Nvidia
chips
to
train
and
deploy
generative
AI
applications
like
OpenAI’s
ChatGPT.

Nvidia’s
strong
performance
in
data
center
shows
that
AI
chips
are
becoming
increasingly
important
for
cloud
providers
and
other
companies
that
run
large
numbers
of
servers.

However,
Nvidia’s
gaming
division,
which
includes
the
company’s
graphics
cards
for
PC
sales,
reported
a
38%
drop
in
revenue
to
$2.24
billion
in
sales
versus
expectations
of
$1.98
billion.
Nvidia
blamed
the
decline
on
a
slower
macroeconomic
environment
as
well
as
the
ramp
up
of
the
company’s
latest
GPUs
for
gaming.

Nvidia’s
automotive
division,
including
chips
and
software
to
develop
self-driving
cars,
grew
114%
year
over
year,
but
remains
small
at
under
$300
million
in
sales
for
the
quarter.

Net
income
for
the
quarter
was
$2.04
billion,
or
82
cents
a
share,
compared
with
$1.62
billion,
or
64
cents,
during
the
year-earlier
period.
Nvidia’s
overall
sales
fell
13%
from
$8.29
billion
a
year
ago.