Nvidia announced earnings for its second fiscal quarter, which ended on August 1, on Wednesday, surpassing Wall Street expectations thanks to robust graphics card sales.
CMP, Nvidia’s cryptocurrency chip product, saw lower sales of $266 million, compared to the $400 million predicted by the company in May. After-hours trading saw Nvidia shares rise by more than 2%
Here are the Refinitiv consensus estimates versus what the chipmaker did.
- Earnings $1.04, adjusted,versus $1.01 expected
- Revenue $6.51 billion vs $6.33 billion anticipated
Nvidia expects $6.8 billion in revenue for the current quarter. This is higher than Refinitiv’s $6.5 billion estimate.
Nvidia is experiencing sustained, huge growth as semiconductors are scarce worldwide. This means that demand for the processors the company specialises in is skyrocketing. Nvidia’s quarterly revenue grew 68% each year. Sales increased by 84 percent in the preceding quarter.
Nvidia graphics chips are becoming increasingly important for various technologies, including gaming and cryptocurrency mining.
Nvidia’s graphics sector, which primarily consists of graphics cards, grew 87%, to $3.91 trillion. This is faster than the compute segment which includes chips for data centres. The compute and network segment grew 46% to $2.6 Billion.
Gaming was the most popular segment and was up 85% to $3.06 Billion. Nvidia has been experiencing supply problems since last year. The company’s latest graphics card line has not sold out in stores and it stated in May that it expects supply issues in the second half. On Wednesday, Nvidia stated that it was experiencing longer lead times throughout its supply chain.
Nvidia stated that the rise in gaming sales is due to both GeForce graphic cards sales and the chips it sells for game console makers like the processor at its core, the Nintendo Switch.
Nvidia’s data centre business also reached an all-time high, increasing 35% annually to $2.37 Billion. This was attributed to Nvidia’s graphics cards for data centres, both in industry and among cloud providers.
Investors closely monitor how Nvidia’s business is correlated to cryptocurrency prices.
The revenue from cryptocurrency fell short of expectations. It reported $266 million in sales of cryptocurrency cards, which was 33% less than expected. Nvidia stated in May that its dedicated chips for mining cryptocurrency (CMP) were expected to be in sales of around $400 million by the August quarter.
Nvidia claims its cryptocurrency cards are an attempt to ensure sufficient chip supply for gamers. It applied software to its GPUs in order to stop them from mining cryptocurrencies. Colette Kress, Nvidia’s CFO, stated that the company expects to see a “minimal contribution” from CMP sales in the future.
Nvidia’s professional visual segment, which mainly includes graphics cards for professional workstations, grew by 156% to $519 million annually. The company’s automotive business is still a small part of its sales with $152m in sequential sales and 37% more than the same quarter last year. This was during the global Covid-19 pandemic that slowed auto production.
Nvidia announced last year that it would buy Arm, a company that makes valuable intellectual property for mobile chip manufacturers, for $40 billion. Some of Nvidia’s competitors are opposed to the deal, fearing that they might lose access to Arm technology.
Nvidia stated in a statement that although some Arm licensees expressed concern or object to the transaction and discussions with regulators are taking much longer than originally thought, they are confident in the deal. Regulators should acknowledge the benefits to Arm, its licensees and the entire industry.
In June, Nvidia’s stock was divided 4-1. The shares have increased by more than 57% over the past year.