A Wise Bet
Read management/analysts’ comments on Nvidia’s Q2 earnings
Gaming business, which accounts for nearly 50% of Nvidia’s revenue, is considered recession-proof due to steady demand growth and the proliferation of online gaming platforms. It is worth noting that sales were not affected even in the worst of market scenarios, underscoring the resilience of the company’s graphic processors. The state-of-the-art GPUs, which also accelerate the performance of third-party CPUs in computing systems, have outsmarted rivals like Intel Corp. (NYSE: INTC) and Advanced Micro Devices (NYSE: AMD). Meanwhile, the company’s cloud gaming service GeForce NOW is considered a potential game-changer.
AI Prowess
Artificial Intelligence, a rapidly growing field where Nvidia’s microprocessors are making a strong presence, is becoming pervasive across all industry verticals, ranging from self-driving cars to smartphones. The company has enhanced its AI capabilities by acquiring UK-based tech firm Arm. The first high-end data-center chip under the partnership, called Grace, was rolled out in April.
In a significant move, Nvidia forayed into cryptocurrency processors, which are dedicated chips for mining digital currencies, eliciting encouraging responses so far. While fulfilling the long-pending demand for fast and efficient mining systems, the new product positions the company to tap into the vast opportuning the crypto market offers.
The fact that we could automate truck driving and last-mile delivery providing an automated chauffeur, those services and benefits and products are never imaginable before. So the size of the IT industry, if you will, the industry that computer companies like ourselves are part of has expanded tremendously. And so, the thing that we want to do is to invest as smartly but as quickly as we can to go after the large operating — large business opportunities, where we can make a real impact. And in doing so — while doing so, to do so in a way that is architecturally sensible.
Jensen Huang, chief executive officer of Nvidia
Broad-based Growth
The stock rallied after the company posted broad-based revenue growth and strong earnings for the second quarter. At $6.5 billion, revenues were up 68% year-over-year and above analysts’ forecast. Consequently, earnings increased sharply to $1.04 per share and topped expectations. The management issued positive guidance for the third quarter.
After making strong gains following the earnings announcement, the stock opened Thursday’s trading sharply higher and maintained the uptrend in the early hours of the session. It has gained 7% in the past 30 days and is once again hovering near last month’s peak.