Nvidia Is Poised to Report a Strong Lift from AI and Gaming

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Nvidia
Corp.

NVDA 2.15%

is scheduled to announce earnings for its first quarter after the market closes Thursday. Proper right here’s what to seek for:

EARNINGS FORECAST: Analysts anticipate Nvidia to report per-share earnings of $1.47, in accordance with a survey by Thomson Reuters, up 86% from the similar quarter a 12 months earlier. A 12 months previously, the graphics-chip maker reported net income of $507 million.

REVENUE FORECAST: Analysts anticipate revenue of $2.91 billion, up 50% from a 12 months earlier.

WHAT TO WATCH:

AI ASCENDANT: World cloud-computing suppliers favor Nvidia’s high-end chips for a number of of their artificial-intelligence calculations. In most quarters over the earlier two years, Nvidia’s product sales to data-center prospects comparable to

Amazon.com
Inc.

and

Microsoft
Corp.

have ballooned by triple-digit percentages from the prior 12 months. Analysts anticipate a extreme double-digit improve this time spherical—slower, positive, nevertheless nonetheless rising at a torrid tempo and from a greater base.

Kevin Cassidy

of

Stifel Financial
Corp.

SF zero.57%

is searching for 65% progress from the sooner 12 months. “They’re altering the enterprise inside the information coronary heart,” he talked about, “and that’s the rationale to non-public shares.”

GAMING THE SYSTEM: Product sales of gaming taking part in playing cards utilized in non-public laptop programs often are weak inside the first quarter, immediately following the holiday season. Nonetheless, many analysts think about Nvidia’s gaming revenue inside the quarter grew by double digits from the sooner 12 months as Nvidia merchandise command premium prices, and the gaming market continues to extend with help from cryptocurrency mining. Chris Caso of

Raymond James Financial
Inc.

expects gaming revenue to have risen by as so much as 68%. And he expects new gaming taking part in playing cards based totally on Nvidia’s latest Volta construction to achieve this summer season, driving further progress inside the second half of the 12 months.

MINING BOOM: Miners of the digital foreign exchange ethereum keep a wild card for Nvidia. The company sells a modified mannequin of its gaming know-how for cryptocurrency mining, nevertheless miners use its gaming taking part in playing cards as successfully. That has fearful some merchants, who think about such product sales is also fleeting. Definitely, miners snapped up the supply of Nvidia sport taking part in playing cards late ultimate 12 months, talked about Mitch Steves, an analyst at RBC Capital Markets LLC. They left additional of the inventory for gamers inside the first quarter, he talked about, and pent-up demand should be mirrored in healthful outcomes. Cryptocurrency could play a smaller place in Nvidia’s revenue going forward, though: The Chinese language language mining-hardware company Bitmain Utilized sciences Ltd. has talked about it expects later this 12 months to provide merchandise designed for ethereum mining from the underside up, most likely displacing graphics taking part in playing cards for that goal.

Write to Ted Greenwald at Ted.Greenwald@wsj.com



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