NVIDIA up 6% after upside second quarter results, mixed third quarter guidance (148.77 -1.30)
NVIDIA (NVDA) is trading 6% higher after beating second quarter estimates but issuing mixed guidance for the third quarter.
NVIDIA reported Q2 non-GAAP EPS down 36% yr/yr with revenue down 17%.
- Gaming segment rev +24% Q/Q but down 27% yr/yr to $1.13 bln, reflecting a decline in shipments of gaming desktop GPUs and SOC modules for gaming platforms, partially offset by growth in gaming notebook GPUs.
- Data center +3% Q/Q but down 14% yr/yr to $655 mln, reflecting lower hyperscale revenue.
- Auto +4% yr/yr to $209 mln.
NVIDIA guided Q3 revenue to $2.842-2.958 bln vs. $2.98 bln S&P Capital IQ Consensus. However, guidance down the income statement implies EPS of $1.48-1.66 vs. $1.53.
The first priority of the company's cash balance is the purchase of Mellanox (MLNX). The company will return to repurchasing its stock after the close of the Mellanox acquisition, expected by the end of this calendar year.
Susquehanna analyst on CNBC said the report was better than feared as the stock has underperformed peers. Strong gross margin guidance implies potential upside in the data center segment (enabling AI for 'hyperscalers' like GOOG/FB/MSFT/AMZN/BABA etc.), which is the key market for the company despite gaming being 51% of total revenue. He rates the stock Positive.
NVDA +6% after hours, peer AMD +1.5%, SMH +0.9%