(Reuters) – Nvidia Corp <NVDA.O> forecast third-quarter revenue above Wall Street expectations on Wednesday, powered by strength in the company’s core market of gamers and an increase in sales to data center customers.
Nvidia, once primarily known for chips that helped video game graphics look more realistic, has since become a key supplier of “accelerator” chips that speed up computing in data centers for artificial intelligence work such as image recognition or natural language processing.
The chipmaker said it expects third-quarter revenue of $4.40 billion, plus or minus 2%, compared with analysts’ estimates of $3.97 billion, according to IBES data from Refinitiv.
The company’s data center segment reported second-quarter revenue of $1.75 billion beating estimates of $1.71 billion, according to FactSet data.
Nvidia’s gaming business posted revenue of $1.65 billion, beating FactSet estimates of $1.41 billion.
The results echo a growing trend among chip suppliers who are benefiting as companies bulk up data centers to cater to the sudden rise in remote work during the COVID-19 pandemic. Rival Advanced Micro Devices Inc <AMD.O> raised its full-year forecast as well.
Nvidia has also benefited from its upcoming chips that tie in with the launch of new gaming consoles during the holiday shopping season at a time when stay at home orders have led to a surge in gaming.
The chipmaker said revenue rose nearly 50% to $3.87 billion in the second quarter ended July 26, above Refinitiv IBES estimates of $3.65 billion.
Net income rose to $622 million, or $0.99 per share, in the quarter, from $552 million, or $0.90 per share, a year earlier.
On an adjusted basis, the company earned $2.18 per share in the quarter compared with analysts’ estimates of $1.97 per share.
(Reporting by Neha Malara in Bengaluru and Stephen Nellis in San Francisco; Editing by Shounak Dasgupta)