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Nvidia Posts Surprise Rise in Revenue on Strong Gaming Chips Demand

Third-quarter forecast also tops expectations.

Katherine Welles / Shutterstock

Nvidia reported a surprise rise in second-quarter revenue and gave a better-than-expected revenue forecast for the current quarter, helped by strong demand for its graphic chips used in gaming and cars.

The company’s shares rose more than 8 percent in extended trading on Thursday.

Nvidia gets a majority of its revenue from its graphic chips made for personal computers. It has also been increasing its focus on making cloud-computing chips that allows people to play graphics-heavy games over the Internet as well as making chips used in a car’s dashboard display and in self-driving cars.

There were fears that a fall in PC sales would hurt Nvidia just as it has Intel and Advanced Micro Devices. But the company’s revenue from its gaming business rose 9 percent in the quarter ended July 26. Revenue from its flagship GeForce gaming chip soared 51 percent.

Nvidia said it was working with more than 50 companies that were exploring its Drive chip for self-driving cars.

Total revenue rose 4.5 percent, to $1.15 billion from $1.10 billion. Analysts on average had expected revenue to fall to $1.01 billion, according to Thomson Reuters I/B/E/S.

Nvidia forecast revenue of $1.16 billion to $1.20 billion in the third quarter, while analysts had expected $1.10 billion.

The company’s net income fell to $26 million, or five cents per share, from $128 million, or 22 cents per share. Excluding items, it earned 34 cents per share.

Nvidia’s shares rose 8.3 percent to $22.14 in extended trading. Up to Thursday’s close, they had risen nearly 2 percent this year, compared with a near 12 percent fall in the broader Dow Jones US chip index.

(Reporting by Kshitiz Goliya in Bengaluru; Editing by Savio D’Souza)

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