Jen-Hsun Huang, Founder, President and CEO of Nvidia
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Nvidia stock fell over 2% in expanded trading after CEO Jensen Huang told analysts that while the sale of processors to cryptocurrency miners will be part of the company’s business, he doesn’t expect it to be “extremely large “.
Nvidia exceeded analysts’ increased earnings and revenue expectations for the fourth quarter of the fiscal year that ended in December.
Here’s how Nvidia did it:
- Merits: $ 3.10 per share, adjusted down from $ 2.81 per share analyst expected, according to Refinitiv.
- revenue: $ 5.00 billion versus $ 4.82 billion as analysts expected, according to Refinitiv.
Earlier this week, Nvidia announced new graphics cards for mining cryptocurrencies like Ethereum, which would allow the company to increase inventory for players who want to run graphically intensive games with the same cards.
Nvidia said it plans to start selling cryptocurrency cards to miners from March, but Huang said he doesn’t think this would be a big part of the company’s business. “We expect this to be a small part of our business in the future,” said Huang.
Ultimately, Nvidia’s sales were up 61% year over year.
Investors had expected revenue to grow over 55% year over year, and Nvidia exceeded those expectations even amid a global semiconductor shortage.
Nvidia also suggested continuing the hot phase and forecasting revenue of $ 5.3 billion for the current quarter, ahead of investor expectations of $ 4.51 billion.
Nvidia stock has gotten a lot of momentum in the past few months, with the stock rising over 106% over the past year. Investors see the chip manufacturer in Santa Clara, California as an important supplier for various new technology trends. It sells semiconductor components for games, artificial intelligence, data centers, and automobiles.
Nvidia has two main segments: Graphics, which are mostly consumer and professional graphics cards, and Compute and Networking, which includes chips for data centers, automobiles and robots.
Both had impressive quarters, which the company attributed in part to the effects of the Covid-19 pandemic. Graphics had sales of $ 3.06 billion, an increase of 47% over the same period last year. Compute and Networking, the data center division, grew 91% year over year to $ 1.95 billion.
PC gaming was a hot market during the pandemic, and Nvidia is perhaps best known for its graphics cards that enable high-performance gaming. Nvidia said its gaming performance was driven by sales of its latest graphics cards.
However, Nvidia was struggling to keep their latest graphics cards in stock. On Wednesday it said the company had increased supply, but inventories are likely to remain low through the end of the current quarter.
Nvidia’s automotive business did not do well during the quarter. It was down 11% to $ 145 million, and declined 23% year-round, according to Nvidia.
Last September, Nvidia announced it would buy ARM from Softbank for $ 40 billion, which will have a profound impact on the semiconductor industry. ARM is developing low-level technology widely used in the industry to develop low-power chips for mobile devices – and delivering technology to most of Nvidia’s competitors. Companies are already lining up to object to the deal through regulatory channels.
“We are making good progress in acquiring Arm, which will create tremendous new opportunities for the entire ecosystem,” said Jensen Huang, CEO of Nvidia, in a statement.
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