Nvidia shares spike 15% on huge forecast beat driven by A.I. chip demand

Nvidia reported first-quarter earnings for its fiscal 2024 on Wednesday, with a stronger-than-expected forecast that drove shares up 15% in extended trading.

Here’s how the company did versus Refinitiv consensus estimates for the quarter ending in April:

• EPS: $1.09, adjusted, versus $0.92 expected
• Revenue: $7.19 billion, versus $6.52 billion expected

Net income for the quarter was $2.04 billion, versus $1.61 billion from the same period last year. However, Nvidia’s overall sales fell 13% on a year-over-year basis.

Nvidia said it expected $0.82 per share on about $11 billion in revenue, far surpassing Refinitiv expectations of $1.06 per share on $7.15 billion in sales.

Nvidia’s gaming division, which includes the company’s graphics cards for PC sales, reported $2.24 billion in sales, versus expectations of $1.98 billion, although overall revenue for the category was down 38% on an annual basis.

Nvidia’s datacenter group, however, reported $4.28 billion in sales, versus expectations of $3.9 billion, a 14% annual increase. Nvidia said that the company’s performance was driven by demand for the company’s GPU chips from cloud companies as well and large consumer internet companies, which use Nvidia chips to train and deploy generative AI applications like OpenAI’s ChatGPT.

Nvidia stock is up 109% so far in 2023, mostly driven by optimism stemming from the company’s leading position in the market for AI chips.