By Asa Fitch
Nvidia Corp. reported a record quarterly revenue and profit, propelled by demand for videogaming and cryptocurrency and despite a broad-based shortage of semiconductors.
The chip maker on Wednesday posted net income for its most recent quarter of $1.91 billion, more than double the year-prior figure. Revenue also rose to $5.66 billion. Both profit and revenue exceeded expectations, according to analysts surveyed by FactSet.
Nvidia is the latest chip company to have enjoyed months of booming demand for computing power that has padded order books. The hot market has triggered shortages of some chips, affecting companies as varied as Apple Inc. and Ford Motor Co. and contributing to President Biden‘s recent call for $50 billion to strengthen the U.S. semiconductor industry.
Santa Clara, Calif.-based Nvidia, which last year became America’s biggest chip company by value, specializes in graphics processors that have flown off the shelf with people flocking to videogaming for entertainment during the pandemic. The way those graphic chips work has also made them popular for other applications, including performing artificial-intelligence calculations and mining cryptocurrencies, further inflating demand.
“Across industries, the adoption of Nvidia computing platforms is accelerating,” company Chief Executive Jensen Huang said in a statement.
The company’s latest generation of graphics cards sold so quickly that a secondary market emerged where scalpers offered them at inflated prices. To help alleviate shortages of cards intended for videogamers, Nvidia has taken the unusual step of adding software to cap their cryptocurrency mining performance. Nvidia hopes the move spurs miners to instead buy new hardware .
Mr. Huang is trying to broaden Nvidia‘s focus even further with the proposed acquisition of British chip designer Arm Holdings for $40 billion. The transaction has raised alarm among some rivals who worry that Nvidia would compromise the neutrality of Arm, which supplies chip designs that go into most of the world’s mobile phones. The UK. government began a national-security review of the deal this year. Nvidia on Wednesday said the proposed transaction was making headway.
The company said it expected revenue of around $6.3 billion for the current quarter, topping Wall Street’s expectations.
Nvidia‘s stock has risen roughly 80% over the past year. To make itself appealing to a broader range of investors, Nvidia on Friday said its board declared a 4-for-1 stock split. The move still requires shareholder approval at the company’s annual meeting scheduled for next week.
The company’s shares were little changed in after-hours trading.
Write to Asa Fitch at [email protected] Zoom.com
(END) Dow Jones Newswires
May 26, 2021 17:16 ET (21:16 GMT)
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