Nvidia Corp.'s (NVDA) record second-quarter revenue and an earnings beat did not impress Wall Street.
Shares of the chipmaker tumbled 6.3% to $154.30 after hours on Thursday. Sales increased 56% to $2.23 billion and topped forecasts of $1.96 billion. Earnings of $1.01 per share topped forecasts of 70 cents per share.
While products, data centers, gaming and cryptocurrency traders drove results in the quarter, CEO and co-founder Jensen Huang pointed to the coming era of robot taxis and self-driving cars that Nvidia would power. In the "era of artificial intelligence," he told investors, Nvidia wants to provide the brains.
Gaming is a stronghold for Nvidia, with sales rising 52% from last year to nearly $1.2 billion.
CFO Collette Kress said cutting edge games such as the Call of Duty and Star Wars franchises, as well as independent titles such as Last Man Standing, drive demand for its gaming processors. Nvidia provides the official platform for the DotA 2 gaming tournament in Seattle, she added, noting that the tournament's $24 million in prize money is double that of the U.S. Open golf tournament.
Sales of Nvidia's products for data centers grew 2.5 times to $416 million, the company said.
Automotive technology sales reached a record $142 million. While the unit is a small piece of Nvidia's top line, Huang touted wins.
The company struck an AI partnership with Baidu Inc. (BIDU) , he noted. Nvidia's technology is in Tesla Inc. (TSLA) cars including the Model 3, and the company has struck deals with Toyota Motor Corp. (TM) and Volvo.
While Nvidia will continue to announce news with partnerships this year and next, Huang told investors that bigger developments in self-driving cars will follow later in 2018.
"Starting next year you'll see robot taxis start to come to the roads," he said.
As for next quarter, Nvidia expects $2.35 billion in sales. Analysts had forecast $2.14 billion in third fiscal-quarter sales, according to FactSet.
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