More Gains for Nvidia Stock
Nvidia stock received a double boost as the tech company said Q1 business revenue for its fiscal 2022 year is above the previously communicated outlook. The tech company made this announcement during its Investor Day, which took place yesterday.
The chip company is expecting Q1 business revenue to come ahead of the $5.3 billion guidance communicated during the year-end earnings call. A better-than-expected performance comes as a result of a “broad-based strength,” with all business units performing better-than-expected. This is also likely to be higher than the $5.32 billion expected from the surveyed market analysts.
“Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year. We believe we will have sufficient supply to support sequential growth beyond Q1,” said Colette Kress, executive vice president and chief financial officer of the tech business.
The chip company is expecting to record another strong year for its Data Center business unit as the industry’s shift to artificial intelligence (AI) products has accelerated.
“We expect this will lead to increased consumption of our platform through cloud service providers, resulting in more purchases as we go through the year. Our EGX platform has strong momentum, and we expect this will drive increased revenue from enterprise and edge computing deployments in the second half of the year,” Kress continued.
Nvidia stock also gained after the tech company announced plans to begin selling central-processing units to serve the surging data-center business sector. The chip business said that its first processor, called “Dubbed Grace,” will operate 10 times faster than existing chips.
The new technology is developed by Arm, the British chip-maker that Nvidia is in the process of acquiring for $40 billion. So far, the tech company was mostly known for fast processors designed to power video games. With a new central-processing unit, Nvidia is taking on one of its key rivals — Intel, whose stock fell over 4% on yesterday’s announcement.
Nvidia stock gained nearly 400% since mid-2019 thanks to its strategy that is focused on technology, video gaming, and AI. New chips will also help the tech company to enter new business sectors, as Dubbed Grace can be used for language-processing and AI tools.
“Leading-edge AI and data science are pushing today’s computer architecture beyond its limits—processing unthinkable amounts of data,” CEO Jensen Huang said.
This announcement comes just a week after Intel unveiled its latest generation data-center chip designed to increase the processing speed and provide improved features for AI applications.
Nvidia stock is up over 16% since the beginning of the year after it returned to trade above the $600 mark for the first time since February.
Nvidia stock gained yesterday after the chip company said it expects to record a better-than-expected Q1 performance and presented its first central-processing unit as it aims to capture a bigger market share in the AI business industry.
About the Author
Avi Ben Ezra is the CTO and Co-founder of SnatchBot and SnatchApp (Snatch Group Limited). He leads the Group’s long-term technology vision and is responsible for running all facets of the tech business which includes being the architect of the platforms and UI interfaces.