Nvidia posted strong Q3 results, exceeding Wall Street expectations. The boost was driven by data centre chip sales (especially those designed to take on AI-oriented tasks.)
The company also gave bullish guidance for the ongoing quarter, which sent its stock soaring in extended trading. The company posted profits of $1.17 per share (before costs like stock compensation) on revenue of $7.1 billion, up 50% from a year ago. The gains were ahead of expectations, with analysts having placed their number at $1.11 per share on revenue of $6.82 billion.
A beneficiary of the COVID-19 pandemic
Nvidia Chief Executive Jensen Huang said the company’s performance in this quarter was outstanding, driven by solid demand for Nvidia products. The company has seen rapid growth in the last 18 months as one of the top beneficiaries of the pandemic. The company even had a hard time providing its rare GeForce graphics card loved by gaming fans.
Even though the company has its fingers in AI now, its primary driver is gaming. The gaming sector alone brought in $3.2 billion, up 42% from a year ago.
GPUs are selling like hot cakes
Huang credited the continued and sustained demand for GeForce GPUs as the primary sales driver in a conference call. The company sells GPUs to data centres where they run cloud computing, AI and ML workloads. Nvidia’s data centre business grew by 55% to hit $2.9 billion this quarter.
According to Huang, GPU sales are primarily driven by hyper-scale customers (cloud companies esp.), who operate data centres and are planning to open up more regions around the world. The other segments are much smaller but significant nonetheless. Find out more about the results here.