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Nvidia surges on Gaming and Data Center Gains

NVIDIA stock

NVIDIA (NASDAQ: NVDA) stock price jumped to the highest level in the past 52-weeks following top and bottom-line beat. The share price rally is also supported by a stronger than expected forecast for fiscal 2021. The company has been witnessing solid demand from gaming, data center, and professional visualization and auto markets.

NVIDIA stock soared close to 13 per cent since the start of this year, extending the twelve months rally to 80 per cent. NVDA share price is currently trading around $273, down slightly from an all-time high of $280. The market analysts are anticipating NVDA share price to cross the $300 level amid substantial revenue growth and strong outlook.

NVDA NVIDIA Corporation daily Stock Chart

Fourth Quarter Beat Supports NVIDIA Stock Price

NVIDIA topped fourth-quarter revenue and earnings estimate by $130ml and $0.22 per share, respectively. Its revenue enlarged 40 per cent year over year to $3.11bn due to solid demand from the gaming and data center. Its gaming revenue of $1.5bn increased 56 per cent while professional visualization revenue of $331ml rose 13% from the year-ago period. The data center revenue grew 43 per cent to $968ml.

Adoption of NVIDIA accelerated computing drove excellent results, with record data center revenue,” said Jensen Huang, founder, and CEO of NVIDIA. “Our initiatives are achieving great success. We are well-positioned for the greatest technology trends of our time,” he said.

The company reported GAAP earnings per share of $1.53 for the fourth quarter, up 66 per cent from a year-ago period. The significant growth in earnings also enhanced cash generation potential. NVDA announced a quarterly dividend of $0.16 per share for the first quarter of fiscal 2021.

Strong Product Demand is likely to Accelerate Momentum

NVIDIA expects the continuation of strong demand for all of its business segments in the new fiscal year. It expects first-quarter revenue to stand in the range of $3bn while a gross margin is expected to stand around 65 per cent of sales. The company claims new computing applications in 5G, robotics, genomics, and autonomous vehicles would have a huge impact on financial numbers.

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Based in Saudi Arabia, Siraj has a strong understanding of and passion for accounting and finance. He has worked for international clients for many years on several projects related to the stock market, equity research and other business, accounting and finance related projects. Siraj is a published financial analyst on the world's leading websites including SeekingAlpha, TheStreet, MSN, and others.

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