Chip giant Nvidia  (NVDA) - Get Report  beat both earnings and revenue estimates for its October quarter (2020 fiscal Q3) but issued weaker-than-expected guidance.

The company beat October quarter estimates with the help of stronger-than-expected Gaming segment revenue and healthy gross margin growth, but issued below-consensus January quarter sales guidance, with notebook gaming GPU and console processor sales forecast to drop sequentially and Data Center segment sales expected to grow strongly amid a pickup in demand from cloud giants.

Shares were rising 0.9% to $211.75 after-hours after Nvidia reported revenue of $3.01 billion versus consensus estimates of $2.92 billion, and non-GAAP EPS of $1.78, beating a $1.58 consensus. However, the company is guiding for January quarter revenue of $2.95 billion, plus or minus 2%, which is below a $3.07 billion consensus.

Eric Jhonsa, tech columnist for RealMoney, live-blogged the company's earnings, as well as an earnings call with analysts.

During the Q&A session, CEO Jensen Huang answered questions about Data Center strength and its sustainability going into next year.

Huang said "We had a strong FQ3 with hyper scalers. A shipped record number of V100 and T4 GPUs. Inference business a "solid double-digit" % of Data Center revenue."


Nvidia says that deployments of AI-powered recommendation systems and "conversational AI" solutions such as voice assistants are driving a lot of inference growth. Reiterates that conversational AI (unlike image-recognition) needs to be done in real-time.


Regarding Automotive revenue (down 6% Y/Y), Nvidia says it saw lower sales of "legacy infotainment modules and autonomous vehicle solutions," partly offset by "growth in AI cockpit solutions."

Qualcomm has been competing aggressively in the infotainment processor space, as Nvidia focuses more on its Drive platform for autonomous and semi-autonomous cars.

The part about "legacy" autonomous vehicle solutions might be a reference to Tesla, which is relying on a proprietary SoC for its third-gen Autopilot hardware after relying on Nvidia for its second-gen hardware. Nvidia sees its Automotive business ramping in the coming years as Drive engagements with major automakers start bearing fruit.

Shares were down 1.8% in after-hours trading to $206.11 shortly after the Nvidia call ended. 

Nvidia is a holding in Jim Cramer'sAction Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells NVDA? Learn more now.