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Nvidia forecasts sales above estimates, powered by data center results

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Nvidia Corp on Thursday forecast second-quarter revenue above analysts' estimates, as demand surges for its chips used in the data centers that power the shift to working remotely because of the new coronavirus outbreak.

FILE PHOTO: The nVIDIA booth is shown at the E3 2017 Electronic Entertainment Expo in Los Angeles, California, U.S. June 13, 2017. REUTERS/ Mike Blake

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REUTERS: Nvidia Corp on Thursday forecast second-quarter revenue above analysts' estimates, as demand surges for its chips used in the data centers that power the shift to working remotely because of the new coronavirus outbreak.

The company said the forecast includes a contribution from its US$6.9 billion purchase of Israeli chip firm Mellanox Technologies Ltd, which strengthened its data center business.

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The chipmaker said it expects current quarter revenue of US$3.65 billion, plus or minus 2per cent, while analysts on average were expecting US$3.29 billion, according to IBES data from Refinitiv.

Shares rose 0.4per cent in after-hours trading after the results were announced.

Much like rivals Intel Corp and Advanced Micro Devices Inc , Nvidia recorded a jump in demand for data center chips as companies invested to strengthen their IT infrastructure to support employees working remotely. Nvidia also said that sales to cloud computing companies drove its data center results.

Revenue rose 39per cent to US$3.08 billion in the first quarter ended April 26, with the data center business recording its first US$1 billion quarter, the company said. Nvidia's data center business hit US$1.14 billion, up 80 percent from a year earlier. The segment beat analyst estimates of US$1.07 billion, according to Refinitiv data.

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