Nvidia FQ4 revenue sets new record despite global semiconductor shortage

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Nvidia is moving its GTC 2020 conference to an online-only format.
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Nvidia generated record revenue in the fiscal fourth quarter, even with the global semiconductor shortage affecting its ability to meet demand.

The corporation experienced explosive growth recently by supplying gamers and data centers with much-needed hardware. Online service providers and homebound consumers have purchased its offering in large quantities to adjust to the more digitalized post-coronavirus pandemic landscape. As a result, CEO Jensen Huang dubbed 2020 a “breakout year” for the firm’s computing platforms.

The fabless chipmaker expects demand from video game enthusiasts will further expand its business in 2021.

Nvidia’s Record-Breaking FQ4 Performance

In the three months ending January 31, Nvidia made $5 billion with adjusted earnings per share (EPS) of $3.10. The company recorded fiscal full-year 2021 sales of $16.68 billion, meaning it set new quarterly and annual income records. Its earning blew away Wall Street’s consensus estimates, which predicted it would bring in $4.2 billion in revenue with profits of $2.81.

The corporation also set new revenue records in its gaming ($2.5 billion) and data center ($1.90 billion) segments in FQ4.

Huang called demand for the company’s RTX 30 Series GPU’s “incredible” and commented a new upgrade cycle had begun. The chief executive noted gamers rushed to purchase its latest offerings to make their play experiences more immersive via cutting-edge features like ray tracing and deep learning super sampling. He mentioned “Cyberpunk 2077,” “Fortnite,” and “Minecraft” as titles that fostered widespread adoption of its new hardware.

In addition, Huang said the corporation’s A100 Tensor Core GPUs are becoming increasingly popular among vertical enterprises and cloud service providers. He indicated the graphics cards are letting thousands of businesses enjoy the benefits of accelerated artificial intelligence (AI) enhanced computing.

He also commented that Nvidia AI products are having a “smartphone moment” across multiple industries.

It is worth noting the chipmaker’s revenue did not suffer from the worldwide component shortage. A confluence of events prompted global tightness on raw materials and production capacity starting late last year. But the firm’s operations team managed to work around the supply crunch during the hugely important holiday sales season.

Nvidia Believes Gaming and Cryptocurrency Demand Will Drive Growth in 2021

For FQ1 2022, Nvidia anticipates bringing in $5.3 billion, plus or minus 2 percent. If the firm hits the midpoint of its guidance, it will expand its quarterly revenue by 72 percent year-over-year. By contrast, market analysts expect the company will gross $4.5 billion in the current period, a forecast indicating annual growth of 46.1 percent.

CFO Colette Kress explained strong worldwide demand for the corporation’s high-end gaming graphics cards would drive its growth. However, the executive stated the global semiconductor shortage is affecting its ability to keep its most popular products in stock. She also noted the vendor’s channel inventory low would remain even though it is working to increase its GPU supply.

That said, the chipmaker believes it can meet demand for its data center components despite the bottleneck.

Nvidia does not expect the recent cryptocurrency boom to act as a driver for its growth. Kress commented digital coin miners only contributed an estimated $100 million to $300 million to its gaming segment last quarter. She also reiterated the company curtailed the Ethereum generating capability of its RTX 3060 graphics cards to make more stock available for gamers.

However, the vendor does not intend to leave any money on the table and will release its first cryptocurrency mining processor (CMP) next month.

Nvidia’s best-in-class gaming hardware will continue being a hot commodity as long as COVID-19 limits entertainment options worldwide. But the firm’s revenue could take a hit in the current quarter due to the global semiconductor shortage. Provided the crisis is resolved relatively soon, it should have no problems meeting its performance goals for FQ2 and beyond.

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