Nvidia’s quarterly revenue beats estimates on strong chip demand

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(Reuters) – Nvidia Corp reported better-than-expected quarterly revenue and profit on Thursday helped by strong demand for its chips used in data centers and gaming devices such as Nintendo Co Ltd’s Switch.

Nvidia shares were down 5 percent in extended trading.

The company’s shares have surged more than 181 percent over the past year, one of the strongest performances across the benchmark S&P 500 index.

Nvidia — which has been diversifying into newer technologies including self-driving cars and artificial intelligence — originally came into prominence in the gaming industry for designing graphics processing chips, that are also used for cryptocurrency mining.

The company’s net income more than doubled to $583 million, or 92 cents per share, in the second quarter ended July 30, from $261 million, or 41 cents per share, a year earlier.

Analysts had expected the company to earn 70 cents per share, according to Thomson Reuters I/B/E/S.

The Santa Clara, California-based company’s revenue rose 56 percent to $2.23 billion, beating estimates of $1.96 billion.

“Numbers were very impressive on the top line for beat and raise, but what’s likely causing the pressure on the stock is the implied bottom line numbers are just modestly above,” said Loop Capital analyst Betsy Van Hees.

Nvidia said on Thursday it expects revenue for the third-quarter to be $2.35 billion, plus or minus 2 percent. Analysts had expected third-quarter revenue of $2.13 billion.