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Nvidia Beats Quarterly Revenue Estimates Amid Tight Supply Of Its Gaming Chips In Stock


02/27/2021


Nvidia Beats Quarterly Revenue Estimates Amid Tight Supply Of Its Gaming Chips In Stock
The chip maker Nvidia Corp beat estimates of the market for its revenues generated in its first quarter and the company expects continued tightness in supply of its flagship gaming chips for over the next several months.
 
There has been high demand for chips that speed up video games all through the Covid-19 pandemic as people were forced to stay back home and the company expects that the demand would continue as people still stay back home even as vaccines against Covid-19 continue to be rolled out throughout the world.
 
The semiconductor chips of the company used in gaming have also become more popular and in demand because they are also used in mining of crypto currency. The Santa Clara, California-based company is now trying to buck this trend by offering special chips for mining of crypto currencies so that the supply tightness for its graphics chips is possible amid a global shortage of chip.
 
The company is the most valuable semiconductor maker by market capitalization because of its aggressive foray into the making chips that are used in the artificial intelligence area which are able to handle tasks such as speech and image recognition in data centers. This has also enhanced the brand of the company and come to be known for soothing other than for its gaming graphic chips.
 
The market cap of the company is now greater than those of rivals Intel Corp and Advanced Micro Devices.
  
The company has not been able to hold on to stocks of its flagship gaming chips that were introduced last fall because of the global chip crunch and it is likely that the supply of the chip would be tight during its fiscal first quarter, said Nvidia’s Chief Financial Officer Colette Kress on a conference call with investors.
 
For its fiscal fourth quarter, it was estimated by analysts that between $100 million and $300 million to Nvidia's sales was accounted for by sale of its chips for crypto currency mining, Kress said. The company is now expecting to rope in revenues of about $50 million revenue in its fiscal first quarter from the new mining chips being offered by the company, Kress added.
 
Nvidia will being to ship software with its gaming chips that will slow down the ability of the chips for mining of some currencies and then the company will launch a new mining-specific chip so that there is discouragement for use of its gaming chips for crypto currency mining, the company said.
 
Gaming features such as display outputs are not needed for chips that are used for crypto currency mining which alternatively means that such crypto currency mining can be done with chips that might not be suitable for gaming, said Nvidia Chief Executive Officer Jensen Huang.
 
"The way the use the chips, they don't need a whole bunch of functionality," Huang said of miners.
 
For its fiscal first quarter, the company now expects to notch up revenue of about $5.30 billion which is over the average estimate of analysts of $4.51 billion.
 
(Source:www.investing.com)


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