© Reuters
Investing.com — Nvidia reported Wednesday better-than-expected second-quarter results and upbeat guidance as the race to adopt generative artificial intelligence continues to bolster demand for its chips.
NVIDIA Corporation (NASDAQ:) was up more than 9% in afterhours trade.
Nvidia adjusted EPS of $2.70 on revenue of $13.51 billion. Analysts polled by Investing.com anticipated EPS of $2.07 on revenue of $11.13 billion.
The high-margin data center business jumped 171% to a record $10.32B in Q2 from a year ago as businesses transition to accelerated computing and generative AI from general-purpose computing.
As demand for AI ramps up, Nvidia’s suite of AI-related products including chips and a cloud service to train generative AI models have become the dominant option for startups, or businesses looking to expand into AI.
Revenue in its gaming business rose 22% to $2.49B for the quarter.
For the fiscal third quarter, the company forecast revenue of $16B, give or take 2%. That was above estimates from Investing.com for $12B. Gross margins are expected to be 71.5% and 72.5%, respectively, plus or minus 50 basis points.
The chipmaker also unveiled an additional $25B stock buyback plan, with stock repurchases expected to continue through this year.
Nvidia guidance will fuel tech bull market with AI leading the charge
The much better-than-expected guidance … “will be fuel in the engine to ignite a tech rally we see continuing into the rest of the year despite the recent pullback and Fed jitters,” Wedbush said in a Wednesday note following Nvidia’s earnings.
The latest results also signal that enterprise spending on AI is set for a massive boost, Wedbush adds, that will benefit AI-related companies including Microsoft (NASDAQ:), Google (NASDAQ:), Apple, Oracle (NYSE:), Palantir, MongoDB (NASDAQ:), Snowflake, Salesforce (NYSE:), AMD, C3.AI and many others.
“This spending wave we estimate will result conservatively in an incremental $800 billion of enterprise/consumer spending over the next decade,” Wedbush added.