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Nvidia Corp.’s earnings and forecast blew past expectations Wednesday despite the COVID-19 pandemic, as the company’s data-center chips brought in more money than the gaming specialist’s core business for the first time.
Nvidia NVDA, -0.99% reported fiscal second-quarter net income of $622 million, or 99 cents a share, compared with $552 million, or 90 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $2.18 a share, compared with $1.24 a share in the year ago period. Revenue rose to $3.87 billion from $2.58 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast earnings of $1.97 a share on revenue of $3.65 billion.
“Adoption of Nvidia computing is accelerating, driving record revenue and exceptional growth,” Chief Executive Jensen Huang said in Wednesday’s news release.
Shares sank less than 1% in after-hours trading, after a recent prolonged run to record highs. The stock declined 1% to $485.54 in the regular trading session to come up short of Monday’s record close of $493.48.
Nvidia has rocketed to a record $300 billion-plus valuation this year, easily surpassing former Silicon Valley semiconductor king Intel Corp. INTC, -0.65% , on hopes for its videogame chips and server offerings. The data-center segment is especially important to investors after Nvidia announced its latest offering for servers earlier this year.
For more: Nvidia is officially not just a gaming company anymore
Nvidia reported $1.75 billion in data-center sales, much more than double last year’s total of $655 million and ahead of the average analyst’s expectations of $1.71 billion. Gaming sales rose more than expected, totaling sales of $1.65 billion after posting revenue of $1.31 billion a year ago. The average Wall Street estimate called for sales of $1.41 billion. It was the first time data-center sales eclipsed gaming sales for the company.
For the third quarter, Nvidia expects revenue of $4.31 billion to $4.49 billion, while analysts had forecast sales of $3.97 billion.
For the year, Nvidia shares have gained 106%, while the PHLX Semiconductor Index SOX, -0.62% has risen 19%, the S&P 500 index SPX, -0.44% has advanced 4.5%, and the Nasdaq Composite Index COMP, -0.57% has gained 24%.
