NVIDIA Corporation Shares Surge After Earnings Beat Estimates

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NVIDIA Corporation Shares Surge After Earnings Beat Estimates
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NVIDIA released its latest earnings report after closing bell tonight, posting GAAP earnings of 79 cents per share and non-GAAP earnings of 85 cents per share on $1.94 billion in revenue. Wall Street had been expecting non-GAAP earnings of 81 cents per share in adjusted earnings, 66 cents per share in GAAP earnings, and $1.9 billion in in revenue.

In last year’s first quarter, the chip maker reported $1.3 billion in revenue, 35 cents per share in GAAP earnings, and 46 cents per share in adjusted earnings.

NVIDIA posts sold results across segments

NVIDIA’s GAAP gross margin improved 190 basis points year over year, rising to 59.4%, while its non-GAAP gross margin expanded 100 basis points year over year to 59.6%. GPU Business revenues rose 45% year over year to $1.56 billion, while the chip maker’s Tegra Processor Business revenues jumped 108% to $332 million. Other revenues fell 35% to $43 million.

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Gaming revenues grew 49% year over year to $1 billion, while Professional Visualization revenues grew 8% to $205 million. Datacenter revenues increased 186% to $409 million, while Automotive revenues grew 24% to $140 million.

NVIDIA provides guidance

For the second quarter, the chip maker expects revenue to be about $1.95 billion, plus or minus 2 percent, and its GAAP gross margin to be 58.4%, plus or minus 50 basis points and its non-GAAP gross margin to be 58.6%, plus or minus 50 basis points.

Analysts have been talking for some time about how NVIDIA should benefit from the accelerated build schedule for the Nintendo Switch, which has been selling better than even Nintendo itself had expected. NVIDIA has also been benefitting from its relatively new partnerships in data centers and automotive.

Shares of NVIDIA stock rose by as much as 11.47% to $114.37 following tonight’s earnings report. The stock still remains well above its 52-week low of $34.93 after going on a massive tear over the last 12 months. The shares have risen so much so fast that some analysts have become concerned about valuation, despite signs of continued strength across all of the chip maker’s segments.

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