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Nvidia’s upbeat forecast powered by data centre
February 10, 2018
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WASHINGTON: Nvidia Corp’s upbeat current-quarter revenue forecast underscored surging demand for its graphics chips used in data centers, gaming devices and cryptocurrency mining, sending its shares up as much as 12 per cent in extended trading.

The company, which also reported better-than-expected quarterly results, is reaping the benefits from the launch of its Volta chip architecture last year. Volta processors power a range of technologies such as artificial intelligence and driverless cars.

“Virtually every internet and cloud service provider has embraced our Volta GPUs,” Nvidia’s Chief Executive Officer Jensen Huang said in a statement.

Graphic chips were initially developed to handle graphics for high end video games and other computers. These chips help share the processing load from the main chip, making it easier and faster to run high end applications.

These chips are now being widely use in new technologies, like artificial intelligence, machine learning.

Revenue from Nvidia’s widely watched data centre business, which counts Microsoft Corp’s Azure cloud business as its customer, more than doubled to $606 million.

That trounced analysts’ average estimate of $541.1 million.

Nvidia also sells chips to Inc’s Amazon Web Services (AWS), which is dueling with Microsoft to handle data and computing for large enterprises

Data centre should continue to grow pretty nicely into calendar 2018 and beyond, Morningstar analyst Abhinav Davuluri said.

The boom in cryptocurrencies is also powering demand for chips from Nvidia and rival AMD as they provide the high computing ability required for cryptocurrency “mining.”

“Strong demand in the cryptocurrency market exceeded our expectations,” Chief Financial Officer Colette Kress said on a conference call. “While the overall contribution of cryptocurrency to our business remains difficult to quantify, we believe it was a higher percentage of revenue than the prior quarter.”

The company said inventory levels of its gaming GPUs throughout the quarter was lower than historical channel inventory levels due to surging demand from cryptocurrency miners.

The price of Bitcoin, the most popular cryptocurrency, rose more than 1,300 per cent in 2017. Prices have, however, dropped about 40 per cent this year.

Nvidia’s revenue from gaming, for which it is best known, rose 29 per cent to $1.74 billion, accounting for a more than half of its total revenue in the fourth quarter, and also beating analysts’ estimate of $1.59 billion.

The company forecast current-quarter revenue of $2.90 billion, plus or minus 2 per cent, well above the analysts’ average estimate of $2.47 billion, according to Thomson Reuters.


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