Data center bet weighs on Nvidia shares - Taipei Times
Sat, May 12, 2018 - Page 10 News List

Data center bet weighs on Nvidia shares

Reuters

Nvidia Corp’s quarterly revenue topped Wall Street estimates on Thursday as demand for its graphics chips used in data centers and gaming devices jumped.

However, sales in its closely watched data center unit fell short of expectations, sending its shares down 2.5 percent in extended trading.

The US chipmaker has diversified its revenue streams by turning to new growth areas such as data centers, artificial intelligence and self-driving cars, while also benefiting from robust sales in its biggest business of supplying graphics chips used in gaming.

Revenue from Nvidia’s data center business, which powers cloud-based services, such as Amazon Web Services, rose 71 percent to US$701 million, but missed analysts’ estimate of US$703 million, Thomson Reuters I/B/E/S said.

Revenue from Nvidia’s best-known business of gaming chips, also used by cryptocurrency miners, rose 68 percent to US$1.72 billion, beating analysts’ average estimate of US$1.65 billion.

However, revenue fell 1 percent quarter-on-quarter in the unit, suggesting a moderating growth from cryptocurrency.

A cryptocurrency boom has powered growth at Nvidia and rival Advanced Micro Devices Inc as their graphics chips provide the high computing ability needed to mine popular virtual currencies such as bitcoin and ethereum, but the sector is battling volatility caused by swings in the currency’s value.

Revenue from Nvidia’s automotive business, which includes its Drive platform used in self-driving cars, rose 4 percent to US$145 million, also topping analysts’ estimate of US$132 million.

The company’s net income rose to US$1.24 billion, or US$1.98 per share, in the first quarter ended April 29, from US$507 million, or US$0.79 cents per share, a year earlier. Total revenue rose to US$3.21 billion from US$1.94 billion. Excluding items, Nvidia earned US$0.0205 per share.

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