Analysts at Pacific Crest are not looking very good right now. On April 4, the firm cut its earnings forecast for FY2018 and FY2019 for Nvidia. On May 9, Nvidia delivered a spectacular first-quarter earnings report. Its earnings doubled, revenue grew 48% year-over-year, and the company forecast revenue of up to ~$2 billion for Q2.
CEO Jensen Huang is forecasting a bright outlook for the company. He noted the strength in AI is driving Nvidia’s datacenter GPU computing business. Though a short-squeeze may explain part of the stock’s rally to new highs after earnings, short float is around 5%. By comparison, AMD has a short float of 12.9% while Intel’s is 1.93 percent.
Nvidia has a massive TAM (total addressable market) ahead. In the quarter, data center revenue tripled to $409 million as overall revenue jumped 48% to $1.94 billion. That marks seven straight quarters of sequential growth in this segment. Investors should expect demand from cloud services growing. Driven by GRID graphics virtualization, DGX-1 AI super-computer sales, and high performance, growth will not slow any time soon.
Takeaway
Nvidia’s outlook for the current quarter is impressive but the company could still beat its own forecast.
