Nvidia forecasts strong holiday revenue as pandemic bolsters video game market

By Stephen Nellis and Ayanti Bera (Reuters) - Nvidia Corp forecast fourth-quarter revenue above Wall Street expectations on Wednesday, betting on robust demand for its graphic chips for gaming devices and data centers. Nvidia also beat revenue expectations for the third quarter as gaming business revenue jumped 37% to $2.27 billion (£1.71 billion) from a year earlier, beating FactSet estimates of $2.06 billion. The pandemic 'continues to affect our business in both positive and negative ways,' Chief Financial Officer Colette Kress said in a statement

Reuters November 19, 2020 04:05:29 IST
Nvidia forecasts strong holiday revenue as pandemic bolsters video game market

Nvidia forecasts strong holiday revenue as pandemic bolsters video game market

By Stephen Nellis and Ayanti Bera

(Reuters) - Nvidia Corp forecast fourth-quarter revenue above Wall Street expectations on Wednesday, betting on robust demand for its graphic chips for gaming devices and data centers.

Nvidia also beat revenue expectations for the third quarter as gaming business revenue jumped 37% to $2.27 billion (£1.71 billion) from a year earlier, beating FactSet estimates of $2.06 billion.

The pandemic "continues to affect our business in both positive and negative ways," Chief Financial Officer Colette Kress said in a statement. "Our Gaming and Data Center market platforms have benefited from stronger demand as people continue to work, learn, and play from home."

Besides high-end gaming devices, Nvidia's graphics chips are being used in data centers to speed up computing for artificial intelligence work such as image recognition, which helped it eclipse rival Intel Corp's market capitalization earlier this year.

Revenue from the data center segment more than doubled to $1.9 billion, compared with FactSet estimates of $1.84 billion.

Nvidia shares dipped 0.6% in late trading after hours. Nvidia said that revenue from Mellanox, the Israeli networking chip firm it acquired last year, contributed "approximately a third" of data center segment revenue, versus 30% in the previous quarter, suggesting that data center revenue excluding Mellanox was not growing as fast as some investors had hoped.

The chipmaker said it expects current-quarter revenue of $4.80 billion, plus or minus 2%, compared with analysts' average estimate of $4.42 billion, according to IBES data from Refinitiv.

Nvidia's earnings per share were $2.91, above analyst estimates of $2.57, according to Refinitiv data.

Earlier in October, Nvidia laid out a multi-year plan to create a new kind of chip for data centers, looking grab a bigger share of growing data center chip market.

(Reporting by Ayanti Bera in Bengaluru and Stephen Nellis in San Francisco; Editing by Arun Koyyur and Cynthia Osterman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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