While most of the press has been about Nvidia pushing into newer growth areas such as data centers artificial intelligence and self-driving cars, the company’s key business still remains selling GPUs to gamers. That is the area where it is doing well again.
Chief Executive Jensen Huang said he thought that China had stabilised and there were 300 million PC gamers in China who were buying Nvidia gear again.
Revenue from its gaming chip business, which accounts for nearly half of Nvidia’s overall sales, rose 11 percent to $1.05 billion in the fourth quarter. Wall Street had thought that it would earn $933.5 million.
The company said it also expects continued growth in sales of its gaming laptops this year, but added that CPU shortages, while improving, will affect the initial ramp of the business.
The company forecast revenue of $2.55 billion, plus or minus two percent, for the current quarter, largely above analysts’ expectations of $2.53 billion, according to IBES data from Refinitiv.
While Nvidia's get-out-of-PCs as much as possible moves had been working well, it looks like this move has turned against it in this quarter. Nvidia's data center business fell to $634 billion, missing analysts’ estimate of $663.7 million.
Nvidia’s net income fell to $394 million in the first quarter ended April 28 from $1.24 billion, a year earlier. Total revenue fell to $2.22 billion but was still above analysts’ estimates of $2.20 billion.