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Solid Gaming, Data-Center Demand to Aid NVIDIA (NVDA) Q1 Earnings
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NVIDIA Corporation’s (NVDA - Free Report) first-quarter fiscal 2022 results, scheduled for a May 26 release, are likely to reflect benefits of stellar demand for chips used in gaming, cloud computing and data centers.
The company’s fate is tied to its gaming and data-center segments, which accounts for a bulk of NVIDIA’s revenues. Robust year-over-year and sequential growth in both divisions last reported quarter’s revenues, along with management's upbeat guidance for the soon-to-be-reported quarter, raise optimism for the two segments.
NVIDIA is benefiting from the pandemic-induced work-from-home and learn-at-home wave. Robust growth in GeForce desktop and notebook graphics processing unit (GPUs) is boosting gaming revenues. Moreover, a surge in the Hyperscale demand is a tailwind for the company’s data-center business.
Notably, the Zacks Consensus Estimate for the gaming segment’s fiscal first-quarter revenues is pegged at $2.72 billion, indicating a surge of 103% year on year and 9% sequentially. Its data center division’s sales are expected to jump 83% year over year and 9% sequentially to $2.08 billion.
Click here to know how the company’s overall fiscal first-quarter performance is anticipated to have been.
NVIDIA’s quarterly performance is likely to have gained from the pandemic-induced stay-at-home instructions which are spurring demand for its gaming chips as people surf games to stay engaged and entertain themselves indoors.
Better visualization and speed are needed for a thrilling gaming experience, which NVIDIA successfully provides through its portfolio of Pascal architecture-based GPUs. Furthermore, with the emergence of massively multiplayer online games (MMOG) and Gaming-as-a-Service (GaaS) concepts, the demand for GPUs has been shooting up exponentially. The trend is likely to have positively impacted the company’s gaming business during the to-be-reported quarter.
Solid Cloud Adoptions to Have Aided Data-Center Business
NVIDIA’s fiscal first-quarter performance is anticipated to have benefited from strength in its data-center business on the growing adoption of cloud-based solutions amid the remote-working and online-learning trend.
The work-and-learn-from-home wave is stoking demand for cloud storage. Apart from this, the lockdown has boosted the usage of online and e-commerce services globally. Therefore, data-center operators are enhancing their capacities to accommodate this demand spike for cloud services.
The data-center business presents a solid growth opportunity for the firm. As more and more businesses are shifting to cloud, the need for data centers is surging. This is likely to have supported the company’s quarterly performance. Increase in Hyperscale demand and growing adoption in the inference market are anticipated to have been tailwinds as well.
The rising adoption of Conversational AI (artificial intelligence) among hyperscale customers is likely to have been a key driver during the period in discussion. NVIDIA considers Conversational AI to be a powerful catalyst for the company in both training and inference. Also, the rising adoption of Natural Language Processing by cloud players is expected to have been an upside during the fiscal first quarter.
Besides, growing adoption of the company’s T4 GPU in public clouds makes us optimistic. Solid public cloud deployments and higher demand for AI video analytics applications are fueling demand for its T4 GPUs.
Preferred by the data-center operators, NVIDIA’s GPUs are likely to have helped the company grab a larger market space during the first quarter. Their impact on the quarterly performance remains to be seen.
Zacks Rank and Other Key Picks
Currently, NVIDIA carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology sector include Facebook , Apple (AAPL - Free Report) and Texas Instruments Incorporated (TXN - Free Report) . While Facebook sports a Zacks Rank #1 (Strong Buy), Apple and Texas Instruments carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Facebook, Apple and Texas Instruments is currently pegged at 20.1%, 12.5% and 9.3%, respectively.
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Image: Shutterstock
Solid Gaming, Data-Center Demand to Aid NVIDIA (NVDA) Q1 Earnings
NVIDIA Corporation’s (NVDA - Free Report) first-quarter fiscal 2022 results, scheduled for a May 26 release, are likely to reflect benefits of stellar demand for chips used in gaming, cloud computing and data centers.
The company’s fate is tied to its gaming and data-center segments, which accounts for a bulk of NVIDIA’s revenues. Robust year-over-year and sequential growth in both divisions last reported quarter’s revenues, along with management's upbeat guidance for the soon-to-be-reported quarter, raise optimism for the two segments.
NVIDIA is benefiting from the pandemic-induced work-from-home and learn-at-home wave. Robust growth in GeForce desktop and notebook graphics processing unit (GPUs) is boosting gaming revenues. Moreover, a surge in the Hyperscale demand is a tailwind for the company’s data-center business.
Notably, the Zacks Consensus Estimate for the gaming segment’s fiscal first-quarter revenues is pegged at $2.72 billion, indicating a surge of 103% year on year and 9% sequentially. Its data center division’s sales are expected to jump 83% year over year and 9% sequentially to $2.08 billion.
Click here to know how the company’s overall fiscal first-quarter performance is anticipated to have been.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
Strong Gaming Chip Demand a Growth Driver
NVIDIA’s quarterly performance is likely to have gained from the pandemic-induced stay-at-home instructions which are spurring demand for its gaming chips as people surf games to stay engaged and entertain themselves indoors.
Better visualization and speed are needed for a thrilling gaming experience, which NVIDIA successfully provides through its portfolio of Pascal architecture-based GPUs. Furthermore, with the emergence of massively multiplayer online games (MMOG) and Gaming-as-a-Service (GaaS) concepts, the demand for GPUs has been shooting up exponentially. The trend is likely to have positively impacted the company’s gaming business during the to-be-reported quarter.
Solid Cloud Adoptions to Have Aided Data-Center Business
NVIDIA’s fiscal first-quarter performance is anticipated to have benefited from strength in its data-center business on the growing adoption of cloud-based solutions amid the remote-working and online-learning trend.
The work-and-learn-from-home wave is stoking demand for cloud storage. Apart from this, the lockdown has boosted the usage of online and e-commerce services globally. Therefore, data-center operators are enhancing their capacities to accommodate this demand spike for cloud services.
The data-center business presents a solid growth opportunity for the firm. As more and more businesses are shifting to cloud, the need for data centers is surging. This is likely to have supported the company’s quarterly performance. Increase in Hyperscale demand and growing adoption in the inference market are anticipated to have been tailwinds as well.
The rising adoption of Conversational AI (artificial intelligence) among hyperscale customers is likely to have been a key driver during the period in discussion. NVIDIA considers Conversational AI to be a powerful catalyst for the company in both training and inference. Also, the rising adoption of Natural Language Processing by cloud players is expected to have been an upside during the fiscal first quarter.
Besides, growing adoption of the company’s T4 GPU in public clouds makes us optimistic. Solid public cloud deployments and higher demand for AI video analytics applications are fueling demand for its T4 GPUs.
Preferred by the data-center operators, NVIDIA’s GPUs are likely to have helped the company grab a larger market space during the first quarter. Their impact on the quarterly performance remains to be seen.
Zacks Rank and Other Key Picks
Currently, NVIDIA carries a Zacks Rank #2 (Buy).
Other top-ranked stocks in the broader technology sector include Facebook , Apple (AAPL - Free Report) and Texas Instruments Incorporated (TXN - Free Report) . While Facebook sports a Zacks Rank #1 (Strong Buy), Apple and Texas Instruments carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Facebook, Apple and Texas Instruments is currently pegged at 20.1%, 12.5% and 9.3%, respectively.
Bitcoin, Like the Internet Itself, Could Change Everything
Blockchain and cryptocurrency have sparked one of the most exciting discussion topics of a generation. Some call it the “Internet of Money” and predict it could change the way money works forever. If true, it could do to banks what Netflix did to Blockbuster and Amazon did to Sears. Experts agree we’re still in the early stages of this technology, and as it grows, it will create several investing opportunities.
Zacks has just revealed 3 companies that can help investors capitalize on the explosive profit potential of Bitcoin and the other cryptocurrencies with significantly less volatility than buying them directly.
See 3 crypto-related stocks now >>