Yahoo Finance tech editor Dan Howley highlights Wall Street expectations for chipmaker Nvidia as the popularity in A.I. investments continue to trend higher.
Video Transcript
– I also want to talk to you more specifically about Nvidia, because once again, it’s a top trending ticker here on Yahoo Finance today. We’ll get their quarterly results after the bell tomorrow. Today we saw a drop, but we’ve certainly have seen a run up in the stock price since the start of the year. What are you expecting to hear?
DANIEL HOWLEY: Yeah, I think the big conversation is going to be around AI. Obviously, that’s where Nvidia has been making its bones as of late. It was previously only making– or not only, but making the majority of its money through gaming. And it’s still doing well as far as gaming goes, though not nearly as well as it did during the pandemic.
As far as early numbers that we’re expecting, we’re looking at a potential $1.6 billion in revenue from the gaming division. Last year, the same quarter, Q4, they brought in 3.42 billion. So a massive potential drop. And look, we saw that in Q3 as well. We saw gaming revenue down 51% in Q3.
And as far as the data center, though, that’s expected to improve. As we talk about inflation, we talk about rising interest rates and some companies potentially pulling back on their broader spending. As far as IT goes for Nvidia and the AI story, it’s all the better when we have conversations about things like OpenAI’s Chat GPT, Microsoft’s Bing, Google Bard.
Those all need to be powered by graphics cards, essentially. They’re high powered. They’re better at handling these massive tasks than your standard CPUs. And so that’s good news. The broader discussion about AI.
Not necessarily those companies, Microsoft, OpenAI, and Google, but the broader conversation. It pushes people more into discussing AI. And that is much better for Nvidia. So we’re looking for some improvements year over year to the data center business, but a steep, steep decline in the gaming business.
– Yeah, the prevailing wisdom out there on the street has been that Nvidia will be the primary beneficiary of Open AI’s Chat GPT. Of course, that is probably well down the road, but certainly a tailwind at some point. Dan Howley, good to see you, sir. Thank you.
