Nvidia Stock Soars After Strong Earnings Beat

Nvidia (NASDAQ:NVDA) shares rose sharply in pre-market trading Friday after the company reported results that topped analyst expectations for the fourth-quarter ended January 26. The ghraphics specialist also beat on guidance for the April quarter.

Adjusted 4Q earnings per share (EPS) came in at $1.89, $0.22 better than the Street’s consensus of $1.67, a 136% increase over EPS of $0.80 from the same period last year. Revenue jumped 41% year-over-year to $3.105 billion, beating expectations of $2.96 billion. Revenue was also up 3% from $3.01 billion, quarter-on-quarter basis.

Datacenter sales came in at $968 million, a strong number not only because it came ahead of consensus for $825.8 million but also because Nvidia had never topped $800 million in quarterly server-chip sales previously. Gaming revenue – Nvidia’s twin revenue segments of artificial intelligence (AI) and gaming chips are both going strong – was $1.49 billion, slightly below a $1.52 billion consensus.

“Adoption of Nvidia accelerated computing drove excellent results, with record data center revenue,” said Jensen Huang, CEO of Nvidia, in a statement. “Our initiatives are achieving great success.”

Huang added, “Nvidia RTX ray tracing is reinventing computer graphics, driving powerful adoption across gaming, VR and design markets, while opening new opportunities in rendering and cloud gaming.”

Full Fiscal Year 2020

For fiscal 2020, revenue was $10.92 billion, down $800 million, or 7.3%, from $11.72 billion a year earlier. Non-GAAP earnings per diluted share came in at $5.79, down 85 cents, or 13%, from $6.64 a year earlier.

Nvidia’s Outlook for 1Q’21

Looking ahead the company said that since it is still quite early in terms of trying to figure out the ultimate impact from the coronavirus, it has reduced its 1Q’21 guidance by $100 million. Revenue is expected to be $3.00 billion, +/- 2 percent while GAAP and non-GAAP gross margins are expected to be 65% and 65.4%, respectively, +/- 50 basis points.

Price Action

Nvidia’s stock traded higher by nearly 20 points, or 7%, to $290 & change p/sh in pre-market trading on Friday on 350K volume. The $172 billion market cap tech company trades in a 52-week range of $132.60 to $273.48. The consensus average price target for NVDA is $271. High target is $301.

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About Ari Haruni 143 Articles
Ari Haruni is the Co-Founder & CEO of Wall Street Pit.

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