Nvidia Corp. Beats On Earnings, Forecasts Stronger Q2 Revenue Growth

Nvidia Corp (NASDAQ:NVDA) has forecast second-quarter revenue above analysts’ estimates.

The high revenue forecast is being driven by surging demand for Nvidia’s microchips, which are used in the data centers that power the shift to working remotely due to the global coronavirus outbreak. Nvidia’s data center chips power functions such as search suggestions and artificial intelligence work such as speech and image recognition.

The chipmaker said it expects current quarter revenue of $3.65 billion U.S., plus or minus 2%, while analysts on average were expecting $3.29 billion U.S., according to IBES data from Refinitiv. The company said the forecast includes a contribution from its $6.9 billion U.S. purchase of Israeli microchip firm Mellanox Technologies Ltd, which strengthened Nvidia’s data center business.

Nvidia said Thursday after markets closed that it has seen a jump in demand for data center chips as companies invest to strengthen their information technology infrastructure to support employees working remotely. Nvidia also said that sales to cloud computing companies drove its data center results in the first quarter.

Reporting first-quarter results, Nvidia said its revenue rose 39% to $3.08 billion U.S. in the period ended April 26, with the data center business recording its first $1 billion U.S. quarter. Nvidia’s data center business hit $1.14 billion U.S., up 80% from a year earlier. The segment beat analyst estimates of $1.07 billion U.S., according to Refinitiv data.

Nvidia’s net income rose to $917 million U.S., or $1.47 U.S. per share, from $394 million U.S., or 64 cents U.S. per share, a year earlier. Shares of Nvidia rose 0.4% in after-hours trading following the results being announced.