Nvidia Founder, President and CEO Jen-Hsun Huang
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Nvidia’s stock went from a 3% gain to a 2% loss in extended trading on Wednesday, after CEO Jensen Huang told analysts on an earnings call that he does not expect the company’s business of selling processors to cryptocurrency miners “growing very large.”
Nvidia exceeded analysts ’expectations for both earnings and revenue for the fourth quarter of its fiscal year, which ended in December.
Here’s what Nvidia did:
- Protection: $ 3.10 per share, adjusted, vs. $ 2.81 per share as analysts would expect, according to Refinitiv.
- Income: $ 5.00 billion, against $ 4.82 billion as analysts would expect, according to Refinitiv.
Earlier this week, Nvidia announced new graphics cards designed to mine cryptocurrencies like ethereum, which the company said would allow it to leverage stock for gamers who want the same cards running graphically intensive games.
Nvidia said it planned to sell cards aimed at selling cryptocurrency to business miners starting in March, but Huang said on the employment call that he did not think it would be a big part of the company’s business. “We think that’s a small part of our business going forward,” he said.
Ultimately, Nvidia sales were up 61% year over year.
Investors had been expecting revenue growth above 55% from last year and Nvidia exceeded those expectations, even in a time of global semiconductor shortages.
Nvidia also suggested that its hot streak continue to forecast $ 5.3 billion in revenue for the current quarter, ahead of investor expectations of $ 4.51 billion.
Nvidia’s stock has undergone a lot of movement in recent months, with the stock rising above 106% in the past year. Investors see the Santa Clara, California chipmaker as a major supplier to several new technology trends. It sells semiconductor parts for gaming, artificial intelligence, data centers, and automation.
Nvidia has two main divisions: Graphics, which are mostly graphics cards for users and professionals, and Compute and Networking, which includes chips for data centers, automation, and devices- artificial.
Both had impressive quarters, which the company attributed in part to effects from the Covid-19 pandemic. Graphics reported $ 3.06 billion in revenue, up 47% from the same period last year. Computing and networking, the data center division, rose 91% year-over-year to $ 1.95 billion.
PC gaming has been a hot market during the pandemic, and Nvidia is perhaps best known for its graphics cards that enable high-performance gaming. Nvidia said its gaming performance was driven by sales of its latest graphics cards.
However, Nvidia has had issues keeping the latest graphics cards in stock. On Wednesday, they said the company was increasing supply but investment is likely to remain low by the end of this quarter.
Nvidia’s car industry did not perform well in this quarter. It was down 11% to $ 145 million, Nvidia said, and finished down 23% for the entire year.
In September last year, Nvidia said it planned to buy ARM from Softbank for $ 40 billion in a trade with a profound impact on the semiconductor industry. ARM develops low-level technology that is widely used throughout the industry to develop low-power chips for mobile devices – and delivers technology to most of Nvidia’s competitors. Companies have already challenged the deal through regulatory channels.
“We are making good progress toward an Army acquisition, which will create huge new opportunities for the entire ecosystem,” Nvidia CEO Jensen Huang said in a statement.