Nvidia Forecasts Revenue Beyond Estimates Despite Coronavirus

Yolanda Curtis
February 16, 2020

Nvidia shares rose about 8 percent in extended trading following the report. Nvidia's graphics processors are well-suited to solving the complex mathematical calculations that go into cryptocurrency mining, driving demand for the chips while the market remained hot in 2018 but causing a lull when it softened thereafter. But in recent years, the company has expanded to sell to data center and cloud computing customers as its chips increasingly power artificial intelligence tasks such as facial recognition and speech recognition.

Datacenter sales came in at $968 million, a strong number not only because it came ahead of consensus for $825.8 million but also because Nvidia had never topped $800 million in quarterly server-chip sales previously.

Nvidia did not name big customers but said that "hyperscale" customers drove the increased data center sales, a group that industry analysts often define as major cloud computing vendors such as Alphabet Inc's GOOGL.O Google, Amazon.com's AMZN.O cloud unit and Microsoft Corp MSFT.O .

After slowing investment in their infrastructure past year, owners of the giant data centers that power Internet services are spending again, including increasing their deployments of graphics chips used to boost artificial intelligence (AI) calculations. Startups such as Cerebras, Nuvia, Graphcore and much more are targeting those new workflows, placing pressure on Nvidia, Intel, and other incumbents to outperform those upstarts.

"I would expect inference to grow, and I would expect training to grow", Huang said.

Revenues for the fourth quarter jumped 41 percent from the year before to USD 2.21 billion while the net profit leaped 68 percent to USD 950 million or USD 1.53 per share.

Looking ahead, the company has reduced its outlook for the first quarter of fiscal 2021 by about Dollars 100 million, to take into account the impact of the coronavirus on results.

Nvidia has published its latest set of financials.

The first quarter outlook does not include any contribution from the pending acquisition of Mellanox, and discussions with China's regulatory agency for the purchase are progressing, Nvidia said in a statement. "We believe the continued strength in Nvidia's data center business is able to partially offset the demand weakness in its consumer gaming business in China due to the coronavirus outbreak". The company reported a profit of $4.52 per share on revenue of $10.9 billion, down 7% from a year ago. Nvidia still needs approval from Chinese regulators.

Nvidia said its gaming revenue rose 56% in the quarter to $1.49 billion, Nvidia said. Revenues are now expected at Dollars 3.00 billion, plus or minus 2 percent.

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