Nvidia Tops Estimates for Sales and Profit on Game-Chip Rebound

Nvidia’s second-quarter sales and profit topped analysts’ estimates, suggesting that a slump in orders may be easing amid a revival in demand for graphics chips and parts used in data centers, according to Bloomberg.

Revenue in the quarter that ended July 28 was $2.58 billion and profit excluding certain costs was $1.24 a share, the company said in a statement. Analysts, on average, had estimated adjusted earnings of $1.14 a share on sales of $2.54 billion.

Sales in all business lines rose from the previous quarter, Nvidia said, a sign the company is addressing challenges that had stalled growth. CEO Jensen Huang has argued that a slowdown in orders for computer-gaming chips and processors for artificial intelligence tasks was temporary as customers worked through stockpiles of unused parts.

Revenue has now shrunk from a year earlier for three straight quarters, and Nvidia forecast another decline of about 9% for the current period. Still, the 17% contraction in the second quarter was narrower than some analysts had projected, and the rate of decline is slowing. That may indicate customers are beginning to place new orders again.

Gaming-chip sales came in at $1.3 billion, up 24% sequentially. Revenue from Nvidia’s second-biggest business, data center, climbed 3.3% from the prior period to $655 million. Net income in the second quarter was $552 million, or 90 cents a share, down from $1.1 billion, or $1.76, in the same period a year earlier.

The company said sales in the current period will be about $2.9 billion, plus or minus 2%. That compares with an average analyst estimate for revenue of $2.98 billion, according to a Bloomberg survey. Adjusted gross margin will be 62.5%, Nvidia said.