'Long live the AI king': Nvidia crushes expectations amid AI-led demand
Investing.com — Nvidia Corporation (NASDAQ:NVDA) reported better-than-expected second-quarter results and upbeat guidance as the race to adopt generative artificial intelligence continues to bolster demand for its chips.
Shares were up more than 7.5% in pre-market Thursday trade.
Nvidia announced adjusted EPS of $2.70 on revenue of $13.51 billion. Analysts polled by Investing.com anticipated EPS of $2.07 on revenue of $11.13 billion.
The high-margin data center business jumped 171% to a record $10.32B in Q2 from a year ago as businesses transition to accelerated computing and generative AI from general-purpose computing.
As demand for AI ramps up, Nvidia's suite of AI-related products including chips and a cloud service to train generative AI models have become the dominant option for startups, or businesses looking to expand into AI. The chipmaker said it expects supply to rise each quarter through next year.
Revenue in its gaming business rose 22% to $2.49B for the quarter.
For the fiscal third quarter, the company forecast revenue of $16B, give or take 2%. That was above estimates from Investing.com for $12B. Gross margins are expected to be 71.5% and 72.5%, respectively, plus or minus 50 basis points.
The much better-than-expected guidance… «will be fuel in the engine to ignite a tech rally we see continuing into the rest of the year despite the recent pullback and Fed jitters,» Wedbush said in a Wednesday note following Nvidia's earnings.
The latest results also signal that enterprise spending on AI is set for a massive boost, Wedbush adds, that will benefit AI-related companies including Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Oracle (NYSE:ORCL), Palantir (NYSE:PLTR), MongoDB
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