Nvidia beats Wall Street expectations with strong Q3 results

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Nvidia

A number of tech companies have done incredibly well over the past year, thanks to these lockdowns. With people having more time than ever on their hands, companies involved in the gaming market have seen significant gains in their stock prices. One of the top manufacturers of graphic cards (or GPUs), Nvidia (NASDAQ: NVDA), completely blew past its Q3 earnings projections. Investors were already expecting strong results from the company, but even bullish analysts were surprised by just how impressive these results were.

Nvidia reported a Q3 net income of around $1.3 billion, a substantial improvement from the $899 million net income reported around a year ago. Total sales came in at $4.73 billion, significantly higher than the already lofty $4.42 billion that most Wall Street analysts were expecting from the company. More specifically, Nvidia’s video game segment brought in $2.3 billion in quarterly revenue for the company.

Nvidia recently launched its new generation of high-end 3000-series graphics cards, which have quickly been sold out all over the world amidst record demand from gamers. In many instances, these cards would go out of stock within minutes of their official launches. Since then, Nvidia has confirmed that it won’t be able to meet up with demand until sometime in 2021.

Nvidia is firing on all cylinders, achieving record revenues in Gaming, Data Center and overall. The new Nvidia GeForce RTX [graphics processing unit] provides our largest-ever generational leap and demand is overwhelming. Nvidia RTX has made ray tracing the new standard in gaming,” CEO Jensen Huang said in an official statement on Wednesday.

Besides that, sales from Nvidia’s data center also beat expectations, coming in at $1.9 billion to the $1.8 billion most analysts expected. Going forward into the fourth quarter, Nvidia said that it expects to continue its revenue growth through the rest of the year and going into 2021.

This success has led to a number of big-time acquisitions as well. Back in September, Nvidia announced it would be spending $40 billion to buy out ARM from Softbank, one of the biggest buyouts seen in the semiconductor industry. However, Nvidia confirmed on Wednesday that it expects to close the ARM acquisition sometime in 2022, which is pretty far off on the horizon.

Despite what was a stellar third quarter for the company, investors don’t seem to be that impressed by the results. Shares are down around 3.0% on Wednesday despite the news, which is a little bit strange. Regardless, the future for Nvidia seems pretty bright at the moment, and long-term investors seem to agree with this as well.

 

Nvidia Company Profile

Nvidia is the leading designer of graphics processing units that enhance the experience on computing platforms. The firm’s chips are used in a variety of end markets, including high-end PCs for gaming, data centers, and automotive infotainment systems. In recent years, the firm has broadened its focus from traditional PC graphics applications such as gaming to more complex and favorable opportunities, including artificial intelligence and autonomous driving, which leverage the high-performance capabilities of the firm’s graphics processing units. – Warrior Trading News

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