NVIDIA stock still in red before the market: NVIDIA achieves record results thanks to high chip demand

Sales rose in the fourth business quarter, which ended in January, by 53 percent to a good 7.6 billion dollars (6.7 billion euros). The bottom line is that the profit of three billion dollars was even more than twice as high as in the same quarter of the previous year.

For the current quarter, NVIDIA announced a further increase in sales to $8.1 billion – while the analysts had expected around $7.3 billion. However, the quarterly result is burdened by a payment of 1.36 billion dollars after the purchase of the chip designer Arm failed. It’s the advance that Arm’s owner, Japanese technology group Softbank, is allowed to keep.

The architecture of the processors with which, among other things, practically all smartphones run, comes from Arm. The takeover plans were torpedoed by concerns from competition watchdogs and rivals that NVIDIA, as the owner of Arm, could disadvantage rivals. The group has always denied this. “We did our best, but the headwind was too strong,” said NVIDIA boss Jensen Huang on Wednesday about the recently canceled deal.

In the gaming division, NVIDIA revenue increased 37 percent to $3.42 billion last quarter. Graphics cards from the company are also used to generate cryptocurrencies. This has also increased demand in recent years in view of the rising prices of digital currencies such as Bitcoin.

The data center business is now almost as big, having jumped 72 percent to $3.26 billion. NVIDIA’s chips and software are used there in particular for applications with artificial intelligence and machine learning. For example, the Facebook group Meta uses NVIDIA systems in its new supercomputer.

At the same time, the component bottlenecks in the semiconductor business are also slowing down NVIDIA. However, the group expects the situation to improve from quarter to quarter.

Meanwhile, auto sales fell 14 percent to $125 million. Business was held back by production problems in the auto industry amid global component shortages. However, NVIDIA has deals with various car companies to equip future generations of vehicles with computers for driving assistants and self-driving cars.

Just on Wednesday, the carmaker Jaguar Land Rover announced that NVIDIA’s computers from 2025 will be installed in all new models of the two brands. NVIDIA boss Huang said in a conference call with analysts that the business model is also to offer downloadable functions such as autonomous driving. The companies want to share the proceeds. A previous deal with Mercedes-Benz was similar, and both manufacturers could bring more than 10 million vehicles with NVIDIA technology on the roads within ten years, Huang emphasized.

Investors were not impressed by the quarterly figures and the outlook: the stock lost 1.62 percent to $260.82 in premarket NASDAQ trading.

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SANTA CLARA (dpa-AFX)

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