Nvidia stock rally loses steam on cloudy outlook for server chips, full-year earnings

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Nvidia stock rallies after big earnings beat

Nvidia Corp. shares shed post-earnings gains in the extended session Thursday after the graphics-chip maker did not provide a full-year outlook and said that data-center sales could remain weak.

“The data center spending pause around the world will likely persist in the second quarter and visibility remains low,” Kress said on the conference call with analysts. “And in gaming, the CPU shortage, while improving, will affect the initial ramp of our laptop business.” Revenue from data centers — Nvidia’s second-largest business segment — fell 10% to $634 million from the year-ago first quarter, while analysts polled by FactSet had expect data-center sales to decrease about 5% to $663.7 million.Overall, the company reported first-quarter net income of $394 million, or 64 cents a share, compared with $1.24 billion, or $1.98 a share, in the year-ago period. Analysts surveyed by FactSet had forecast earnings of 58 cents a share.

Gaming, Nvidia’s largest segment, saw revenue fall 39% to $1.06 billion, but that was better than the $933.5 million expected by Wall Street. On the call, Huang said that gaming sales in China were “vibrant.”Professional visualization sales rose 6% to $266 million, while the Street expected $289.9 million. Auto sales rose 14% to $166 million, while analysts expected $163.

 

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