Key Takeaways

  • Nvidia’s data center revenue came in above analysts’ expectations, with growth accelerating from the previous quarter’s pace.
  • Demand for services offered by data centers has grown rapidly during the pandemic, boosting demand for Nvidia’s chips.
  • Nvidia’s data center segment became its biggest platform as data center revenue surpassed gaming revenue.
Nvidia Earnings Results
MetricBeat/Miss/MatchReported ValueAnalysts’ Prediction
Adjusted EPSBeat$1.36$1.30
Data Center RevenueBeat$3.8B$3.6B

Source: Predictions based on analysts’ consensus from Visible Alpha

NVIDIA (NVDA) Financial Results: Analysis

Nvidia Corporation (NVDA) reported Q1 FY 2023 earnings on May 25, 2022, that beat analysts’ expectations. Adjusted earnings per share (EPS) came in above analyst forecasts, rising 49.5% year over year (YOY). Nvidia’s revenue also beat consensus estimates, up 46.4% compared to the year-ago quarter to a new quarterly record of $8.3 billion. Data center revenue surpassed analysts’ expectations.

The company’s shares fell more than 9% in extended trading. Over the past year, Nvidia’s shares have provided a total return of 8.6%, above the S&P 500’s total return of -5.9%.

NVDA Data Center Revenue

Nvidia’s data center revenue grew 83.1% YOY, accelerating from the previous quarter’s pace. The company said that its data center business was now its biggest platform. Data center revenue of $3.8 billion eclipsed gaming revenue of $3.6 billion. Both data center and gaming revenue hit record levels in the quarter.

Nvidia has traditionally specialized in making chips for the gaming and graphics industry, being a pioneer in the development of graphics processing units (GPUs). It turns out that the robust computational capabilities employed by GPUs to power video games and graphics software are also well suited for technologies like artificial intelligence (AI) and machine learning. Both of those technologies are increasingly important for the rapidly growing data center market. Demand for remote computing power increased substantially during the pandemic as more people began working from home and businesses were forced to shift certain operations online. That development has helped to boost demand for Nvidia’s chips used by data centers.

Increasing focus on the metaverse, a virtual world built on technologies like virtual reality (VR) and augmented reality (AR), is likely to create additional sources of demand for the company’s data center chips.

Nvidia Outlook

Nvidia expects to generate approximately $8.1 billion in revenue in Q2 FY 2023, representing YOY growth of approximately 24.5%.

Nvidia’s next earnings report (for Q2 FY 2023) is projected to be released on Aug. 16, 2022.

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