Chipmaker Nvidia tops estimates on gaming, data center gains

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(Reuters) – Nvidia Corp (NVDA.O) reported a better-than-expected quarterly profit, driven by strong demand for its graphics chips used in personal computers and devices for gaming, and in data centers.

A NVIDIA logo is shown at SIGGRAPH 2017 in Los Angeles, California, U.S. July 31, 2017. REUTERS/Mike Blake – RC1C8FF654B0

Revenue from gaming, for which the company is best known, rose 25.5 percent to $1.56 billion, accounting for nearly 60 percent of total revenue in the third quarter.

That beat analysts average estimate of $1.31 billion, according to Thomson Reuters I/B/E/S.

Nvidia’s growth, however, hinges on newer areas such as artificial intelligence, self driving cars – for which it unveiled its first chip in October – as well as data centers, where its customers include Inc’s (AMZN.O) Amazon Web Services and Microsoft Corp’s (MSFT.O) Azure.

Revenue from the data center business, its second-biggest revenue contributor, more than doubled to $501 million, beating analysts’ estimate of $474.2 million.

Revenue from automotive business rose 13.3 percent to $144 million, but fell shy of analysts’ estimate of $149.8 million.

Nvidia’s total revenue rose 31.5 percent to $2.64 billion.

Net income rose to $838 million, or $1.33 per share, in the quarter ended Oct. 29, from $542 million, or 83 cents per share, a year earlier.

Analysts’ on average were expecting a profit of 94 cents per share on revenue of $2.36 billion, according to Thomson Reuters I/B/E/S.

The company’ shares were down 0.14 percent in volatile trading after the bell. They have surged about 92 percent this year, making its the third-best performing stock on the PHLX semiconductor index .SOX.

Reporting by Laharee Chatterjee in Bengaluru; Editing by Shounak Dasgupta and Savio D’Souza

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