Nvidia's Biggest Pleasant Surprise May Be Yet to Come
The chipmaker was rewarded for sticking to its guidance, but it’s what’s not baked in yet from new products that may cheer investors the most.
Nvidia’s next-generation chips may be its most promising in years.
Photographer: SOPA Images/LightRocketThese days, with the fallout from the coronavirus pandemic wreaking havoc on economic and business projections, a company can stand out just by maintaining its outlook. For chipmaker Nvidia Corp., it helps that the outlook was already rosy to begin with.
On Tuesday, a day after Applied Materials Inc. and Twitter Inc. both withdrew their current-quarter forecasts, Nvidia surprised investors by not altering the financial guidance it gave on Feb. 13. At the time, the chipmaker projected revenue of $3 billion, plus or minus 2 percent, for its fiscal first quarter ending in April, representing a 35% increase from the prior year. The shares surged more than 17%, and continued their climb Wednesday, adding another 2.9%.
Nvidia may prove more resilient than most in dealing with the negative effects of the virus outbreak. In fact, its two key businesses — gaming and cloud computing — have actually benefited from some of the coronavirus mitigation developments in recent weeks.