Shares of Nvidia (NVDA) are up 8% after the semiconductor company reported better-than-expected fourth-quarter earnings.
The Santa Clara, California-based chipmaker reported earnings per share (EPS) of $0.88 U.S. versus $0.81 U.S. that was expected among analysts who cover the company.
Revenue in Q4 totalled $6.05 billion U.S. compared to $6.00 billion U.S. that was expected on Wall Street.
Additionally, Nvidia forecast $6.50 billion U.S. of sales for the current first quarter, which was higher than the $6.33 billion U.S. that analysts has anticipated.
Nvidia is seen by many analysts as one of the chip stocks best positioned to endure an economic slowdown, and it is widely viewed as a leader in the red-hot area of artificial intelligence (AI).
Nvidia’s data centre business, which includes chips for AI, continues to grow, and is expected to benefit from AI software like ChatGPT.
Nvidia’s graphics processors are the global leader when it comes to machine learning and AI technology.
Most of Nvidia’s sales of AI chips fall into the company’s data center category, which saw revenues increase 11% on an annual basis to $3.62 billion U.S. during Q4.
However, Nvidia reported $1.83 billion U.S. in Q4 gaming revenue, a 46% decline from a year earlier. The company blamed the decline on slumping chip sales to video game console manufacturers because they have too much inventory.
Nvidia’s stock has rallied 45% so far in 2023. However, at $207.54 U.S. per share, the stock remains 7% below where it was trading at 12 months ago.
