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Strong Graphic Chip Demand to Aid NVIDIA's (NVDA) Q4 Earnings
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NVIDIA Corporation (NVDA - Free Report) is slated to report fourth-quarter fiscal 2022 results on Feb 16. The company’s fourth-quarter results are likely to reflect the benefits of strong demand for its graphic chips from gaming and data center markets.
NVIDIA is benefiting from the pandemic-induced work-from-home and online-learning wave. A surge in Hyperscale demand is a tailwind for the company’s data center business. Moreover, robust growth in the GeForce desktop and notebook graphics processing units (GPUs) is boosting NVDA’s gaming revenues.
The Zacks Consensus Estimate for the data center segment’s fiscal fourth-quarter revenues is pegged at $3.17 billion, indicating a jump of 66% year over year and 8% sequentially. Its gaming division’s sales are expected to surge 35% year over year and 4% sequentially to $3.36 billion.
Click here to know how NVIDIA’s overall fiscal fourth-quarter performance is anticipated to be.
In the last reported quarter, revenues from the gaming business unit shot up 42% year over year and 5% sequentially to $3.22 billion on higher sales across the company’s notebook and desktop gaming GPUs and game console system-on-chips.
The pandemic-induced stay-at-home instructions are spurring demand for NVIDIA’s gaming chips as people are surfing games to stay engaged and entertained indoors.
Additionally, better visualization and speed are needed for a thrilling gaming experience, which NVIDIA successfully provides through its portfolio of Pascal architecture-based GPUs. Moreover, with the massive emergence of multiplayer online games and Gaming-as-a-Service concepts, demand for GPUs has been shooting up exponentially. The trend is likely to have positively impacted Zacks Rank #2 (Buy) NVDA’s gaming business during the to-be-reported quarter.
The data center business presents solid growth opportunities for NVIDIA. As more businesses are shifting to the cloud, the need for data centers is surging. This is likely to have supported NVIDIA’s quarterly performance. The increase in Hyperscale demand and growing adoption in the inference market are anticipated to have acted as tailwinds as well.
The rising adoption of Conversational AI among hyperscale customers is likely to have been a key driver during the period in discussion. NVDA 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 fourth quarter.
Additionally, NVIDIA’s data center business is likely to have continued the growth momentum during the fourth quarter on the accelerated adoption of cloud-based solutions amid the remote-working and online-learning trends.
Lockdown, travel restrictions and social-distancing measures adopted by governments worldwide to contain the spread of COVID-19 have boosted the usage of online and e-commerce services globally. Also, the pandemic-induced work-and-learn-from-home wave is stoking demand for cloud storage. Therefore, data center operators are enhancing their capacities to accommodate this demand spike for cloud services.
The growing adoption of the company’s T4 GPU in public clouds makes NVIDIA optimistic. Solid public cloud deployments and higher demand for AI video analytics applications are fueling demand for its T4 GPUs.
Strong Earnings Season for Semiconductors
Strong chip demand amid the ongoing work-and-learn-from-home and accelerated digitalization trends has led to a great earnings season for semiconductor companies. Let’s take a quick look at the latest quarterly performance of major semiconductor players – Advanced Micro Devices (AMD - Free Report) , Qualcomm (QCOM - Free Report) and Intel (INTC - Free Report) .
Advanced Micro Devices’ adjusted earnings increased 77% year over year to 92 cents per share in the fourth quarter of 2021 and surpassed the Zacks Consensus Estimate by 22.7%. Revenues of Advanced Micro Devices surged 49% to $4.83 billion, exceeding the consensus mark by 6.7%.
Advanced Micro Devices expects first-quarter 2022 revenues of $5 billion (+/-$100 million), which indicates year-over-year growth of 45% and a quarter-over-quarter improvement of 4%. For 2022, AMD expects revenues to increase 31% year over year to $21.5 billion.
Qualcomm’s first-quarter fiscal 2022 earnings of $3.23 per share beat the Zacks Consensus Estimate by 22 cents. Also, Qualcomm’s non-GAAP revenues of $10.7 billion beat the consensus mark of $10.45 billion.
For the second quarter of fiscal 2022, Qualcomm expects GAAP revenues between $10.2 billion and $11 billion. Non-GAAP earnings per share (EPS) for QCOM’s second-quarter fiscal 2022 are forecast in the range of $2.80-$3.00.
Intel’s fourth-quarter 2021 non-GAAP earnings of $1.09 per share exceeded the Zacks Consensus Estimate by 21.1%. Non-GAAP revenues of Intel were up 3.5% year over year at $19.53 billion and surpassed the consensus mark by 6.7%.
For the first quarter of 2022, Intel expects non-GAAP revenues of about $18.3 billion. INTC projects non-GAAP EPS of 80 cents for the first quarter.
While Advanced Micro Devices sports a Zacks Rank #1 at present, Qualcomm and Intel carry a Zacks Rank #2 and #3 (Hold), respectively.
Image: Shutterstock
Strong Graphic Chip Demand to Aid NVIDIA's (NVDA) Q4 Earnings
NVIDIA Corporation (NVDA - Free Report) is slated to report fourth-quarter fiscal 2022 results on Feb 16. The company’s fourth-quarter results are likely to reflect the benefits of strong demand for its graphic chips from gaming and data center markets.
NVIDIA is benefiting from the pandemic-induced work-from-home and online-learning wave. A surge in Hyperscale demand is a tailwind for the company’s data center business. Moreover, robust growth in the GeForce desktop and notebook graphics processing units (GPUs) is boosting NVDA’s gaming revenues.
The Zacks Consensus Estimate for the data center segment’s fiscal fourth-quarter revenues is pegged at $3.17 billion, indicating a jump of 66% year over year and 8% sequentially. Its gaming division’s sales are expected to surge 35% year over year and 4% sequentially to $3.36 billion.
Click here to know how NVIDIA’s overall fiscal fourth-quarter performance is anticipated to be.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote
Strong Gaming Chip Demand
In the last reported quarter, revenues from the gaming business unit shot up 42% year over year and 5% sequentially to $3.22 billion on higher sales across the company’s notebook and desktop gaming GPUs and game console system-on-chips.
The pandemic-induced stay-at-home instructions are spurring demand for NVIDIA’s gaming chips as people are surfing games to stay engaged and entertained indoors.
Additionally, better visualization and speed are needed for a thrilling gaming experience, which NVIDIA successfully provides through its portfolio of Pascal architecture-based GPUs. Moreover, with the massive emergence of multiplayer online games and Gaming-as-a-Service concepts, demand for GPUs has been shooting up exponentially. The trend is likely to have positively impacted Zacks Rank #2 (Buy) NVDA’s gaming business during the to-be-reported quarter.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Continued Momentum in Data Center Business
The data center business presents solid growth opportunities for NVIDIA. As more businesses are shifting to the cloud, the need for data centers is surging. This is likely to have supported NVIDIA’s quarterly performance. The increase in Hyperscale demand and growing adoption in the inference market are anticipated to have acted as tailwinds as well.
The rising adoption of Conversational AI among hyperscale customers is likely to have been a key driver during the period in discussion. NVDA 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 fourth quarter.
Additionally, NVIDIA’s data center business is likely to have continued the growth momentum during the fourth quarter on the accelerated adoption of cloud-based solutions amid the remote-working and online-learning trends.
Lockdown, travel restrictions and social-distancing measures adopted by governments worldwide to contain the spread of COVID-19 have boosted the usage of online and e-commerce services globally. Also, the pandemic-induced work-and-learn-from-home wave is stoking demand for cloud storage. Therefore, data center operators are enhancing their capacities to accommodate this demand spike for cloud services.
The growing adoption of the company’s T4 GPU in public clouds makes NVIDIA optimistic. Solid public cloud deployments and higher demand for AI video analytics applications are fueling demand for its T4 GPUs.
Strong Earnings Season for Semiconductors
Strong chip demand amid the ongoing work-and-learn-from-home and accelerated digitalization trends has led to a great earnings season for semiconductor companies. Let’s take a quick look at the latest quarterly performance of major semiconductor players – Advanced Micro Devices (AMD - Free Report) , Qualcomm (QCOM - Free Report) and Intel (INTC - Free Report) .
Advanced Micro Devices’ adjusted earnings increased 77% year over year to 92 cents per share in the fourth quarter of 2021 and surpassed the Zacks Consensus Estimate by 22.7%. Revenues of Advanced Micro Devices surged 49% to $4.83 billion, exceeding the consensus mark by 6.7%.
Advanced Micro Devices expects first-quarter 2022 revenues of $5 billion (+/-$100 million), which indicates year-over-year growth of 45% and a quarter-over-quarter improvement of 4%. For 2022, AMD expects revenues to increase 31% year over year to $21.5 billion.
Qualcomm’s first-quarter fiscal 2022 earnings of $3.23 per share beat the Zacks Consensus Estimate by 22 cents. Also, Qualcomm’s non-GAAP revenues of $10.7 billion beat the consensus mark of $10.45 billion.
For the second quarter of fiscal 2022, Qualcomm expects GAAP revenues between $10.2 billion and $11 billion. Non-GAAP earnings per share (EPS) for QCOM’s second-quarter fiscal 2022 are forecast in the range of $2.80-$3.00.
Intel’s fourth-quarter 2021 non-GAAP earnings of $1.09 per share exceeded the Zacks Consensus Estimate by 21.1%. Non-GAAP revenues of Intel were up 3.5% year over year at $19.53 billion and surpassed the consensus mark by 6.7%.
For the first quarter of 2022, Intel expects non-GAAP revenues of about $18.3 billion. INTC projects non-GAAP EPS of 80 cents for the first quarter.
While Advanced Micro Devices sports a Zacks Rank #1 at present, Qualcomm and Intel carry a Zacks Rank #2 and #3 (Hold), respectively.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.