Nvidia Corporation (NASDAQ:NVDA) impressed with its second-quarter earnings and said it still expects to grow in the second half of the year even though the semiconductor supply shortage will make it difficult.
The US computer chip maker, which is the ninth-largest company in the S&P 500 and has agreed a US$40bn takeover of British chip designer ARM Holdings, reported stronger-than-expected sales growth in chips for the gaming and data centre markets, but lower-than-expected sales of its cryptocurrency mining processors (CMP).
Total revenue for the quarter of US$6.51bn was up 68% on last year and beat Wall Street’s $6.3bn estimate, with US$3.1bn from gaming and US$2.4bn from data centres.
Cryptocurrency sales are a fraction of its core markets, with CMP sales of US$266mln, short of the US$400mln predicted three months ago.
Earnings per share of US$1.04 on a diluted basis jumped 89% and were also ahead of the US$1.01 average forecast on the Street.
For the current quarter, chief financial officer Colette Kress guided to revenue of US$6.66-6.94bn, with most of the growth from data centre sales.
“We do expect gaming to be up slightly on a sequential basis, but remember we are still supply constrained,” she told reporters and analysts on a conference call.
She said the third-quarter results “are really about the supply that we believe we can have for Q3”.
Chief executive Jensen Huang added: “We have enough supply to meet our second-half company growth plans.
“We expect to be able to achieve our company’s growth plans for next year.
“Meanwhile, we’re securing pretty significant long-term supply commitments as we expand into all these different market initiatives that we’ve set ourselves up for,” Huang said.
“And so I would expect that we will see a supply constrained environment for the vast majority of the year, is my guess at the moment.”
The ARM deal is still up in the air, with the company saying in the statement: “Although some ARM licensees have expressed concerns or objected to the transaction, and discussions with regulators are taking longer than initially thought, we are confident in the deal and that regulators should recognize the benefits of the acquisition to ARM, its licensees, and the industry.”
As for crypto chips, Kress said she expects a “minimal contribution” from CMP sales in the coming quarters.