Microchip and semiconductor company Nvidia (NVDA) reported fourth-quarter earnings and sales that beat analyst expectations and provided strong guidance for the current first quarter.
Nvidia’s earnings per share (EPS) came in at $1.32 U.S. versus $1.22 U.S. that had been expected by Wall Street, a 69% year-over-year increase. Revenues amounted to $7.64 billion U.S. versus $7.42 billion U.S. that was expected, up 53% year-over-year.
Nvidia said it expects to report revenue of $8.1 billion U.S. in the current first quarter, higher than analyst expectations of $7.29 billion U.S. Nvidia CEO The company said in a statement that it is seeing “exceptional” demand because its chips are useful for artificial intelligence and other intensive computing applications.
Nvidia also said that supply constraints were easing, and that the company’s supply of products would increase “substantially” in the second half of 2022.
Nvidia has gotten a boost as cloud providers and enterprises turn to its graphics processors that are used for artificial intelligence applications like speech recognition and recommendations. Nvidia reported $3.26 billion U.S. in sales from its data center business, up 71% annually.
Gaming is still Nvidia’s largest market, as its latest GeForce graphics processors are ideal for playing advanced computer games. The gaming business rose 37% year-over-year to $3.42 billion U.S. in Q4, driven by GeForce sales.
However, Nvidia’s automotive business was down 14% to $125 million U.S. It’s not a primary focus for the company but represents a growth market for its microchips. Nvidia said that car makers’ supply constraints were one reason that its automotive sales fell.
In a sign of how Nvidia is navigating supply chain issues, the company said it had $9 billion U.S. in long-term supply obligations, up from $2.54 billion U.S. a year ago.
Nvidia was in talks to purchase chip technology company Arm from SoftBank, but the company announced earlier this month that the transaction had fallen apart under regulatory scrutiny. The company said it expected a $1.36 billion U.S. charge to operating expenses as a result of the Arm deal failing to close.
Nvidia stock is down 12% year-to-date at $265.11 a share. Even with that decline, the stock remains up 78% over the past 12-months.
