Nvidia (NVDA) earnings report Q1 2024

Nvidia reported first-quarter earnings for fiscal 2024 on Wednesday, with a stronger-than-expected forecast that drove shares up 19% in extended trading.

Here’s how the company fared against Refinitiv consensus estimates for the quarter ending in April:

• EPS: $1.09, adjusted, vs. $0.92 expected
• Income: $7.19 billion, versus $6.52 billion expected

Nvidia said it expected about $11 billion, plus or minus 2% in revenue, in the current quarter, far beating Refinitiv expectations of $1.06 a share on $7.15 billion in sales.

Nvidia shares are up 109% so far in 2023, driven largely by optimism stemming from the company’s leading position in the AI ​​chip market. Nvidia CEO Jensen Huang said the company saw “increasing demand” for data center products.

Nvidia’s data center group reported $4.28 billion in sales, beating expectations of $3.9 billion, a 14% year-over-year increase. Nvidia said the company’s performance was driven by demand for its GPU chips from cloud companies as well and large consumer internet companies, which use Nvidia chips to train and deploy generative AI applications such as OpenAI’s ChatGPT.

Nvidia’s strong performance in data centers shows that AI chips are becoming increasingly important to cloud providers and other companies that operate large numbers of servers.

However, Nvidia’s gaming division, which includes the company’s graphics cards for PC sales, reported $2.24 billion in sales, beating expectations of $1.98 billion, although overall revenue for the category was down 38% year-over-year. Nvidia blamed a slower macroeconomic environment as well as the ramp of the company’s latest gaming GPUs for the decline.

Nvidia’s automotive division, including chips and software for developing self-driving cars, grew 114% year-over-year but remains small at less than $300 million in sales for the quarter.

Net income for the quarter was $2.04 billion, compared to $1.62 billion from the same period last year. However, Nvidia’s overall sales fell 13% year over year. Nvidia adjusts earnings, excludes gains or losses from investments and a portion of interest costs.