Nvidia earnings: Self-driving cars, AI, games, Nintendo Switch drive big quarter

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Nvidia keeps on raking in revenue from chips for artificial intelligence, game graphics, the Nintendo Switch game console, and self-driving cars. But we’ll have to listen to the conference call shortly to find out if cryptocurrency mining drove sales as well.

The world’s biggest stand-alone maker of graphics chips and AI chips reported $2.2 billion in revenues for its second fiscal quarter, blowing past Wall Street estimates.

Analysts had expected earnings of 70 cents a share on a GAAP basis and quarterly revenue of $1.96 billion. Net income came in at 92 cents a share, compared with 41 cents a year ago. Revenues a year ago were $1.4 billion.

One question is whether Nvidia’s earnings got a boost from cryptocurrency’s popularity, as rival Advanced Micro Devices cited the possibility of demand for graphics cards from cryptocurrency miners. Cryptocurrency miners can use computing power to unearth new cryptocurrency.

Nvidia started in 1993 as one among dozens of graphics chip startups. It survived the competition and became the only stand-alone graphics chip maker, competing directly with CPU makers Intel and Advanced Micro Devices. It supplies graphics chips for the Nintendo Switch game console, but much of its fortunes are now tied to self-driving cars and artificial intelligence. Its rivals also include Qualcomm.

“Adoption of Nvidia [graphics process unit] GPU computing is accelerating, driving growth across our businesses,” said Jen-Hsun Huang, founder and CEO of Nvidia, in a statement. “Data center revenue increased more than two and a half times. A growing number of car and robot-taxi companies are choosing our Drive PX self-driving computing platform. And in gaming, increasingly the world’s most popular form of entertainment, we power the fastest growing platforms – GeForce and Nintendo Switch.”

He added, “Nearly every industry and company is awakening to the power of AI. Our new Volta GPU, the most complex processor ever built, delivers a 100-fold speed up for deep learning beyond our best GPU of four years ago. This quarter, we shipped Volta in volume to leading AI customers. This is the era of AI, and the Nvidia GPU has become its brain. We have incredible opportunities ahead of us.”

Nvidia’s market value is $98.5 billion, up dramatically in the past few years, thanks to growing enthusiasm for AI. Nvidia is forecasting revenue of $2.35 billion for the third fiscal quarter, which ends at the end of October. Nvidia’s stock is down 4.5 percent in after-hours trading to $156.85 a share.

“Nvidia had a very solid quarter driven by big growth from gaming and data center,” said Patrick Moorhead, analyst Moor Insights & Strategy, in an email. “Both Pascal-based GeForce, Tesla and even Tegra are hitting on all cylinders in a rapidly growing market, all goodness for the company. The only real blemish came from a discontinuation of an expected Intel IP licensing agreement. Nvidia will start to see a bit more competition in the gaming and machine learning category in the next two quarters, but I expect the company to still have a sizable raw performance lead with Volta-based GPUs.”







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