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Monday, July 4, 2022
Stocks & Shares

Nvidia stock rises nearly 3% after strong quarterly results

Nvidia

The firm reported record revenue of over $6.5 billion, which was nearly 68% from the same period a year earlier

Nvidia stock rose nearly 3% in extended hours after the technology company published strong quarterly results. The stock reached $194 bringing its total market capitalisation to over $474 billion.

The fast-growing graphical processing unit (GPU) company announced impressive quarterly results after the regular session on Wednesday.

The firm reported record revenue of over $6.5 billion, which was nearly 68% from the same period a year earlier. The strong year-on-year (YOY) comparison was mostly because of the fact that the firm sold fewer products in Q2 2020 as the economy locked up. Its diluted earnings per share rose by 276% to $0.94.

By segment, the company’s gaming revenue increased by 85% to over $3 billion while its data centre revenue increased by 35% to $2.37 billion. In total, the firm’s total net income increased from $1.92 billion in the first quarter to over $2.374 billion.

Analysts were expecting that the firm would report relatively weak quarterly results mostly because of the cryptocurrencies industry. In Q2, the prices of most cryptocurrencies declined sharply as China intensified its pressure on miners. Bitcoin is an important part of Nvidia’s business model because its GPUs are the most popular by miners.

The Nvidia stock price also advanced after the company delivered an update on Arm Holdings. In a statement, the firm’s Chief Executive said that the regulatory approval process could take longer than expected. He lamented that some Arm licensees had objected to the deal. He said: We are confident in the deal and that regulators should recognize the benefits of the acquisition to the arm is licenses and the industry.

Most analysts believe that the Nvidia stock will likely keep rising in the near term. Analysts at Evercore ISI, Wells Fargo, UBS, and Rosenblatt Securities have a target of over $200.

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