Nvidia’s Q2 revenue forecasted to jump 63%

• Nvidia Corp (NASDAQ: NVDA) share price has rallied over 5% since it announced a four-for-one stock split
• The US’ largest chipmaker also reported another ‘fantastic quarter’, on the back of record sales from its Gaming, Data Center and Professional Visualization segments
• The company has guided for Q2 revenue to increase 63% year-on-year
• The stock is up roughly 20% year to date, though analysts only see a slight 2.4% upside in the next 12 months
• Buy and sell Nvidia stocks with an IG account

Nvidia stock price: What’s the latest?

Nvidia shares closed relatively flat on Wednesday (27 May 2021), after it announced its first quarter results for fiscal 2022.

In the last two weeks, Nvidia’s stock price has rallied nearly 15%, just as the cryptocurrency market has taken a huge beating.

Nvidia’s share price also rose over 5% in the days after it announced a four-for-one stock split in a bid to make its stock less expensive for investors.

The semiconductor counter is up roughly 20% year to date. Analyst sentiments published by MarketBeat show a consensus rating of ‘buy’ and an average price target of US$643.15 on the stock.

The price target represents a slight 2.4% upside from the chipmaker’s last traded price of US$628.

Nvidia reports another ‘record’ quarter

On Wednesday, the US’ largest semiconductor company reported ‘record’ revenue of US$5.66 billion for the first quarter ended 02 May 2021, up 84% from a year earlier and up 13% from the previous quarter.

This had come on the back of record sales from its Gaming, Data Center and Professional Visualization platforms.

GAAP (unadjusted) earnings per diluted share for the quarter were US$3.03, up 106% from a year ago and up 31% from the previous quarter. Non-GAAP (adjusted) earnings per diluted share were US$3.66, up 103% from a year earlier and up 18% from the previous quarter.

‘We had a fantastic quarter, with strong demand for our products driving record revenue,’ said Jensen Huang, founder and CEO of Nvidia.

‘Our Data Center business continues to expand, as the world’s industries take up Nvidia AI to process computer vision, conversational AI, natural language understanding and recommender systems,’ Huang noted, adding that adoption of Nvidia’s computing platforms ‘is accelerating’.

He also provided an update on Mellanox, which Nvidia acquired in April 2020, and Arm - which it is in the midst of acquiring.

Mellanox, Huang said, has ‘exceeded’ expectations, giving the company a firm foothold in the data center space. Meanwhile, the company also continues to ‘make headway’ the acquisition of Arm.

What is Nvidia’s outlook for Q2 of fiscal 2022?

Revenue is expected to come in at US$6.3 billion for the second quarter of fiscal 2022, plus or minus 2%, Nvidia said in its latest earnings release.

This would equate to a 62.8% year-on-year increase from Q2 of fiscal 2021.

GAAP and non-GAAP gross margins are expected to be 64.6% and 66.5%, respectively, plus or minus 50 basis points.

GAAP and non-GAAP operating expenses are expected to be approximately US$1.76 billion and US$1.26 billion, respectively.

GAAP and non-GAAP other income and expense are both expected to be an expense of approximately US$50 million.

Finally, GAAP and non-GAAP tax rates are both expected to be 10%, plus or minus 1 percent, excluding any discrete items.

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