Nvidia’s (NVDA) stock is up 25% after the microchip and semiconductor company reported first-quarter earnings that topped Wall Street expectations and said that it is seeing “surging demand” for its artificial intelligence chips.
The Silicon Valley-based chip designer reported earnings per share of $1.09 U.S. versus $0.92 U.S. that was expected among analysts who cover the company.
Revenue in Q1 amounted to $7.19 billion U.S. versus $6.52 billion U.S. that was forecast.
Looking ahead, Nvidia said it expects sales of about $11 billion U.S., plus or minus 2%, in the current second quarter, more than 50% higher than Wall Street estimates of $7.15 billion U.S.
Nvidia chief executive officer (CEO) Jensen Huang said the company is seeing “surging demand” for its microchips that enable generative A.I. technologies, including training of large language models.
Nvidia’s data center group, which includes microchips and semiconductors used in A.I. applications, reported $4.28 billion U.S. in sales, versus expectations of $3.90 billion U.S., a 14% annual increase.
However, the company’s gaming division, which includes graphics cards for personal computers, reported a 38% drop in revenue to $2.24 billion U.S. versus expectations of $1.98 billion U.S.
Nvidia said the decline in its gaming division was due to a slower macroeconomic environment as well as slumping personal computer sales globally.
Nvidia’s automotive division, which includes chips used in self-driving cars, grew 114% in Q1 from a year ago to $300 million U.S. in sales.
Prior to today (May 25), Nvidia’s stock was up 109% so far in 2023 and trading at $305.38 U.S. per share. The post-earnings boost is set to push the stock to a new all-time high.
