Graphics card giant Nvidia (NVDA) It announced its earnings in the fourth quarter after the bell on Wednesday, beating analyst estimates despite a 46% year-over-year decline in gaming revenue.
Even better for Nvidia, the company says it expects first-quarter revenue of $6.5 billion versus Wall Street estimates of $6.35 billion.
Nvidia shares rose more than 6% immediately after the report was released.
Here are the top numbers from the report compared to what Wall Street was expecting from the company, as compiled by Bloomberg.
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he won: 6.05 billion dollars, compared to the expected 6.02 billion dollars
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Adjusted EPS: $0.88 vs. $0.81 expected
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data center revenue: 3.62 billion dollars, compared to the expected 3.87 billion dollars
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the games: $1.83 billion versus the expected $1.6 billion
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Professional perception: $226 million versus the expected $195 million
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Cars and robots: $294 million versus the expected $267 million
Nvidia CEO Jensen Huang said in a statement: “Artificial intelligence is at an inflection point, as it is poised for widespread adoption across every industry. From startups to large corporations, we are seeing accelerating interest in the versatility and capabilities of generative AI.
Wall Street believes Nvidia has a new potential growth opportunity with the new explosion of interest in generative AI platforms such as OpenAI’s ChatGPT, Microsoft’s (MSFT) Bing, and Google’s (GOOG, GOOGL) Bard. AI platforms require a huge amount of processing power and Nvidia graphics cards are well suited for such applications.
Revenue from Nvidia’s AI-powered data center business jumped from $968 million in the fourth quarter of 2019 to $3.62 billion in the most recent quarter.
But the chip maker, like the rest of the gaming industry, was also dealing with a drop in sales compared to the same time last year when gamers were clamoring for new hardware and software at the end of the pandemic era. In Q3, the company’s business revenue is a game 51% year on year.
The pandemic has players scrambling for Nvidia-powered graphics cards and PCs so they can play big-name titles like “Call of Duty,” “Fortnite,” and “Roblox.” Now that they have these hardware, they don’t need to upgrade, which results in higher Nvidia gaming revenue.
“Games are recovering from the post-epidemic downturn, with gamers enthusiastically embracing the new Ada architecture GPUs with AI neural rendering,” Huang said.
Throw in the pandemic era, and look at the company’s earnings for the fourth quarter of February 2020 and gaming revenue was $1.5 billion. last year? Only 954 million dollars. In other words, the gaming sector is correcting for the unsustainable growth it experienced during the pandemic.
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