Nvidia surges 8% after record earnings results blow past analyst expectations

FILE PHOTO: A NVIDIA logo is shown at SIGGRAPH 2017 in Los Angeles, California, U.S. July 31, 2017.  REUTERS/Mike Blake
NVIDIA logo shown at SIGGRAPH 2017
  • Shares of Nvidia jumped as much as 8% on Thursday after the company reported strong second-quarter earnings.
  • Shares of the GPU manufacturer reversed early losses of 1% as investors digested the results.
  • Nvidia said it expects the ongoing semiconductor shortage to last well into 2022 and remains hopeful its proposed acquisition of Arm will be approved.
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Nvidia surged as much as 8% on Thursday after the graphics card manufacturer reported record second-quarter earnings results that surpassed analyst estimates.

The company saw surging demand in its gaming, data center, and professional visualizations business units, and said it is struggling to keep up with demand amid an ongoing semiconductor shortage. Nvidia CEO Jensen Huang expects the chip shortage to last well into 2022.

Here were the key numbers:

Revenue: $6.51 billion, versus estimates of $6.34 billion
Adjusted earnings per share: $1.04, versus estimates of $1.02
Third quarter outlook: $6.80 billion, versus estimates of $6.53 billion

On the crypto front, Nvidia said it expects a decline in the sale of its crypto mining processors, especially as ethereum transitions to EIP-3554, which will make the cryptocurrency essentially unmineable. The company also said it expects the ongoing chip shortage to last well into 2022.

Nvidia also said it continues to work through the regulatory process for completing its proposed $40 billion acquisition of Arm, which has not yet closed due to anti-trust concerns.

"Although some Arm licensees have expressed concerns or objected to the transaction, and discussions with regulators are taking longer than initially thought, we are confident in the deal and that regulators should recognize the benefits of the acquisition to Arm, its licensees, and the industry," Nvidia CFO Colette Kress said.

The results impressed Wall Street analysts, with many seeing demand outstripping supply in the immediate future. While that's often a great problem to have in business, it will limit near-term upside in the stock, analysts said.

The strong results helped add to Nvidia's year-to-date gains of 51% as of Thursday afternoon. The stock has remained perched near record highs even after it completed its 4-for-1 stock split earlier this year.

Nvidia stock chart
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