Nvidia Stocks Make Late Surge To Beat Wall Street Predictions

NVIDIA
FILE PHOTO: The logo of Nvidia Corporation is seen during the annual Computex computer exhibition in Taipei, Taiwan May 30, 2017.
(Photo: REUTERS/Tyrone Siu/File Photo GLOBAL BUSINESS WEEK AHEAD)

Shares of Nvidia Corp. (NVDA) made a last-minute rally during after-hours sessions Thursday after the company beat analysts' estimates despite feeble profits that were starting to raise a little bit of worry from within the board.

A quick recap: Nvidia stocks has climbed 12 percent in the first three months this year, following a 0.9 percent fall in regular trade a few days earlier to settle at $148.77, against 15 percent for S&P 500 index and 18% for the NASDAQ Composite Index. Thursday.

NVDA posted a net profit of $553 million for the second quarter, or 91 cents per share, compared with $948 million, or $1.55 per share, in the same quarter last year. The company's adjusted earnings were pegged at $1.24 per share.

But the American graphics and tech giant is still reeling almost 41 percent in the last four quarters, and it remained mostly in the red with 11 percent decline in the first week of August, until Thursday's close. Its revenue dropped to $2.59 billion - from $3.11 billion - in the same period last year.

An overview of key figures: Nvidia disclosed an adjusted profit per quarter-share of $1.25 for the fiscal year against analysts' consensus of $1.16 cents, based on a FactSet report. The company's revenue weakened 18 percent on a year-on-year basis, but this was actually better compared to the $2.56 billion average projections of Wall Street.

In contrast, Nvidia's total accumulated sales from its gaming business - which is its largest source of revenue - plunged 28 percent to $1.30 billion, while market observers were anticipating $1.25 billion. The company's sales from its data-center unit, fell 15 percent from a year ago to $654 million while investors were projecting $667.4 million.

According to Jensen Huang, chief executive of Nvidia, the company ramped up its computing capacity as market competition "heats up in the next-generation artificial intelligence, including autonomous technology like self-driving cars and remoted-controlled delivery robots."

The graphics processor maker also sees revenue of $2.85 billion to $2.97 billion in the next three months, while Wall Street sets it at $2.99 billion. The company also outlined revenue guidance for the quarter ending October 2019 of nearly $3 billion (give or take 2 percent), compared to $2.97 billion analyst consensus.

Wall Street market strategists are generally upbeat on NVDA stock; 70 percent gave it a "Buy" or equivalent rating, while 25 percent gave the stock a "Hold" rating, FactSet, which has an average price target of $183 for NVDA - reported.

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