Nvidia Shares Surge After Company Beats on Earnings and Guidance

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Nvidia shares rose sharply after the company reported better-than-expected revenue and earnings. It also beat on guidance for the April quarter, but noted that it reduced guidance by $100 million as a result of the coronavirus in China.

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The stock was rising 7.09% to $289.97 a share in postmarket trading Thursday, after having fallen 0.65% in regular trading hours

Adjusted earnings per share came in at $1.89 for the January quarter, beating analysts estimates of $1.67. Revenue was $3.105 billion, beating Wall Street expectations of $2.96 billion.

Datacenter sales came in at $968 million, significantly ahead of an $826 million consensus estimate, while gaming segment revenue was $1.49 billion, slightly below a $1.52 billion consensus. “Adoption of Nvidia accelerated computing drove excellent results, with record data center revenue,” said CEO Jensen Huang. “Our initiatives are achieving great success.”

Huang added, “Nvidia RTX ray tracing is reinventing computer graphics, driving powerful adoption across gaming, VR and design markets, while opening new opportunities in rendering and cloud gaming.”

Analysts had expected the ray tracing chip to drive particularly strong results in gaming revenue. The company did reduce its current quarter revenue estimates by $100 million due to the impact of the coronavirus in China.Management is now looking for revenue of $3 billion, plus or minus 2%, still ahead of consensus estimates of $2.89 billion.

Adjusted gross margin is expected to be 65.4%, plus or minus 0.5 percentage points, against expectations of 63.5%.

The stock had risen 13% year-to-date leading into the earnings print.

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