Nvidia Q1 Profits: AI Boosts Top/bottom Line

Nvidia shared its Q1 earnings and did better than expected in both sales and profits. This was because of their data center business. They predict they'll earn $11 billion next quarter, which is more than what Wall Street was thinking.

Nvidia is doing really well because of their powerful graphics cards and server products. Lots of people are investing in the company and as a result, their stock price has gone up a lot. Over the last year, Nvidia's shares have gone up a massive 77%! In comparison, their rival company AMD went up only 12%, and Intel's shares actually went down by 30%.

Bloomberg collected the most important numbers from the report. They compared them to what was expected.

The revenue was $7.2 billion. It was more than the expected revenue which was $6.5 billion.

Adj. EPS was $1.09, but people expected $0.92.

The gaming industry exceeded expectations by making $2.2 billion. It was estimated to make $1.9 billion. This is good news for the gaming industry.

A blog section has reported that the data center will cost $4.2 billion. This is higher than the expected cost of $3.9 billion.

Nvidia's shares surged by over 13% after the announcement.

"Nvidia CEO Jensen Huang said that the computer industry is currently experiencing two changes at the same time. These changes are referred to as accelerated computing and generative AI."

Companies are moving from general purpose to accelerated computing. They are doing this with a trillion dollars of installed global data center infrastructure. They are racing to apply generative AI into every product, service and business process.

Nvidia is doing well in AI due to OpenAI's ChatGPT and Microsoft and Google's own AI efforts. However, the gaming industry is slowing down for Nvidia.

People aren't spending as much on electronics as they used to because of the pandemic. During lockdown, people bought lots of graphics cards and PCs to keep busy at home.

Gamers don't need to upgrade their systems since they already have them in their hands. Intel and AMD also have similar problems with their client computing groups.

Nvidia will release its Q1 earnings on Wednesday. This will happen after the bell rings. Mike Blake from REUTERS wrote about it.

Nvidia's slowdown will soon stop. In Q2, the company is expected to show revenue growth in its gaming business, according to Wall Street and Bloomberg data. This will help Nvidia increase its overall revenue growth after three consecutive quarters of decline since Q1.

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Nvidia's data center business did well. They had a 14% increase in revenue for the quarter.

Yahoo Finance's tech editor is Daniel Howley. He's been writing about tech since 2011. You can find him on Twitter as @DanielHowley.

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