Shares of Nvidia Corp. sailed higher on Friday after posting a strong quarterly report that had Wall Street cheering.
Nvidia shares hit a record of $217.18, citing a stronger demand for graphics chips that are used in gaming and data centers.
The company’s data center business had analysts watching closely as this unit had ts revenue more than double. Nvidia reported that revenue from its data center business hit $501 million. Analysts had expected just $474.2 million.
Analyst Romit Shah remarked in a note to clients, “Datacenter results have been stronger than forecast and we underestimated the value the market would assign to this franchise.”
It was this past spring that the company launched the Volta chips in its Tesla V100 data center graphic processing unit (GPU). The chips will power systems from artificial intelligence (AI) to driverless cars.
CFO Colette Kress commented, “Shipments of the Tesla V100 GPU began in Q2 and ramped significantly in Q3 driven primarily by demand from cloud service providers and high-performance computing.”
For the third quarter, the company announced revenue of $2.636 billion which was a growth of 32% from the year ago quarter. Gross margin hit 59.5% and operating income was $895 million, a growth of 40% compared to the third quarter a year ago. Net income saw a 55% year over year incease at $838 million, EPS, diluted, was $1.33, a growth of 60% from the year ago quarter.
The stock has seen gains of over 100% this year.
Disclaimer: We have no position in NVIDIA Corporation (NASDAQ: NVDA) and have not been compensated for this article.