Nvidia Corp reported a better-than-expected quarterly profit, driven by strong demand for its graphics chips used in personal computers and devices for gaming, and in data centers. Revenue from gaming, for which the company is best known, rose 25.5 percent to $1.56 billion, accounting for nearly 60 percent of total revenue in the third quarter.
That beat analysts average estimate of $1.31 billion, according to Thomson Reuters I/B/E/S. Nvidia’s growth, however, hinges on newer areas such as artificial intelligence, self driving cars – for which it unveiled its first chip in October – as well as data centers, where its customers include Amazon.com Inc’s Amazon Web Services and Microsoft Corp’s Azure.
Revenue from the data center business, its second-biggest revenue contributor, more than doubled to $501 million, beating analysts’ estimate of $474.2 million. Revenue from automotive business rose 13.3 percent to $144 million, but fell shy of analysts’ estimate of $149.8 million. Nvidia’s total revenue rose 31.5 percent to $2.64 billion. Net income rose to $838 million, or $1.33 per share, in the quarter ended Oct. 29, from $542 million, or 83 cents per share, a year earlier.
Analysts’ on average were expecting a profit of 94 cents per share on revenue of $2.36 billion, according to Thomson Reuters I/B/E/S. The company’ shares were down 0.14 percent in volatile trading after the bell. They have surged about 92 percent this year, making its the third-best performing stock on the PHLX semiconductor index.