(Reuters) - Nvidia Corp (NVDA.O) reported a better-than-expected 48.4 percent jump in quarterly revenue, helped by strong demand for its chips that are used by major cloud computing providers in data centers.
Nvidia’s shares jumped 14.2 percent to $117.57 after the bell.
Data center revenue more than doubled in the first quarter to $409 million, handily beating analysts’ estimates of $318.2 million, according to FactSet.
“All of the world’s major internet and cloud service providers now use Nvidia’s Tesla-based GPU (graphics processing unit) accelerators,” Chief Financial Officer Colette Kress said on a post-earnings call on Tuesday.
Nvidia’s chips, also used by Amazon.com Inc’s (AMZN.O) Amazon Web Services, offer artificial intelligence and machine learning capabilities that are crucial for faster data analysis.
Chief Executive Jensen Huang, who co-founded Nvidia and has led the company since its inception in 1993, has broadened its efforts into fast-growing areas such as the automotive semiconductor industry and artificial intelligence.
“What’s impressive about the numbers is the robust nature of Nvidia’s business model as the company changes,” Loop Capital analyst Betsy van Hees said.
Revenue in Nvidia’s automotive business, which produces the DRIVE PX 2 self-driving system used by Tesla Inc (TSLA.O), reported a roughly 24 percent rise to $140 million.
Analysts were expecting revenue of $132 million, according to FactSet.
Revenue from the company’s gaming business, which includes the popular GeForce graphics card series, rose nearly 50 percent to $1.03 billion. The business accounted for 53 percent of the company’s total revenue in the quarter.
Analysts were expecting revenue of $1.11 billion from the gaming business, according to FactSet.
The Santa Clara, California-based company also forecast current-quarter revenue of $1.95 billion, plus or minus 2 percent. Analysts on average were expecting $1.89 billion, according to Thomson Reuters I/B/E/S.
The company’s net income more than doubled to $507 million, or 79 cents per share, in the quarter ended April 30.
Nvidia’s revenue jumped to $1.94 billion from $1.31 billion, beating analysts’ expectations of $1.91 billion, according to Thomson Reuters I/B/E/S.
Excluding items, Nvidia earned 85 cents per share.
Through Tuesday's close, Nvidia's shares had fallen 3.6 percent this year, well underperforming the roughly 7 percent gain in the broader S&P 500 .SPX. The downturn comes after the stock more than tripled last year and was the best performer on the S&P 500.
Reporting by Narottam Medhora in Bengaluru; Editing by Maju Samuel