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NVIDIA on Conference Call

• Revenue reached a record $3.21 billion, up 66% year-over-year, up 10% sequentially and above our outlook of$2.9 billion.
  • Gaming revenue grew 68 percent from a year earlier to $1.72 billion.
  • Datacenter revenue grew 71 percent from a year earlier to a record $701 million.
  • Professional Visualization revenue grew 22 percent from a year earlier to $251 million.
  • Automotive revenue grew 4 percent from a year earlier to a record $145 million.
• The Gaming market remains robust and the popular Battle Royale genre is attracting a new wave of gamers to the GeForce platform.
• GPU Pricing- While supply was tight earlier in the quarter, the situation is now easing; pleased to see that channel prices for our GPUs are beginning to normalize.
• Cryptocurrency demand was again stronger-than-expected but were able to fulfill most of it with crypto-specific GPUs, which are included in OEM business at $289 million; Looking into Q2, expect crypto-specific revenue to be about one-third of its Q1 level.
• Data Center demand remains robust; pipeline remains strong.
• Seeing strong demand in AI inferencing.
• DGX-2 system seeing strong interest from hyperscale and customers.
• Data Center- estimate the TAM at $50 billion by 2023, which extends previous forecast of $30 billion by 2020.
• Made key product announcements on the advancement of autonomous vehicles and established a total addressable market opportunity of$60 billion by 2035; believe that every vehicle will be autonomous one day. By 2035, this will encompass 100 million autonomous passenger vehicles and 10 million robot taxis.

Notable post-earnings movers

• Post-earnings gainers: TTD +19.5%, IMMR +12.3%, VRAY +9.8%, FSCT +8.9%, ASYS +3.4%
• Post-earnings losers: SYMC -12.6%, SGYP -8.6%, FATE -7.8%, CASA -6.9%, TLND -6%, XON -5.6%, RDFN -4.3%, NKTR -4%, FLS -3.9%, YELP -3.9%, TIVO -3.9%, DBX -2.5%

Closing Market Summary: Wall Street Rallies for Second Consecutive Session

Stocks had another strong outing on Thursday, their second in a row, lifting the S&P 500 to a nearly two-month high. The benchmark index finished the session higher by 0.9% and is now about 45 points above its 50-day moving average. The Dow and the Nasdaq also closed with comfortable gains, adding 0.8% and 0.9%, respectively, while the Russell 2000 advanced 0.5%.

The market was firing on all cylinders, with all 11 S&P sectors finishing in the green. Telecom services (+1.9%), utilities (+1.3%), health care (+1.3%), and information technology (+1.3%) led the charge, while consumer discretionary (+0.4%) lagged a bit as retailers and Amazon (AMZN 1609.08, +1.08) underperformed. The other groups settled with gains between 0.6% and 1.0%.

Within the tech space, Apple (AAPL 190.04, +2.68) -- the S&P 500's largest component by market cap -- jumped 1.4% on Thursday, securing its ninth consecutive advance and a new record high. Other tech giants -- including FAANG stocks Facebook (FB 185.53, +2.87) and Alphabet (GOOG 1097.57, +14.81) -- also showed notable strength, reminiscing last year's tech-charged rally.

Inflation data -- namely, the Consumer Price Index for April -- helped fuel buying on Thursday, coming in slightly below estimates, and thereby tempering concerns that the Fed might have to be more aggressive in its path to normalization. The weekly Initial Claims report added to that upbeat narrative, pointing to a still-humming job market.

Overseas, the Bank of England voted 7-2 in favor of keeping its official bank rate and its asset purchase program unchanged, but BoE Governor Mike Carney added that interest rates will likely go up by the end of the year. In the Middle East, Israel struck nearly all of Iran's military infrastructure in Syria overnight in response to an Iranian missile attack on Israeli-held territory.

Treasury yields moved mostly lower on Thursday as bonds advanced for the first time this week. The yield on the benchmark 10-yr Treasury note dropped below the psychologically important 3.00% mark, losing three points to finish at 2.97%. The 2-yr yield ticked higher though, closing up one basis point at 2.54%.

The S&P 500, the Dow, and the Nasdaq hold week-to-date gains between 2.0% and 2.7% going into Friday's session, on course for their best week since early March.

Reviewing Thursday's economic data, which included the April Consumer Price Index, weekly Initial Claims, and the April Treasury Budget:

• Total CPI increased 0.2% (consensus +0.3%) in April, while core CPI, which excludes food and energy, rose 0.1% (consensus +0.2%). On a year-over-year basis, total CPI is up 2.5% (vs +2.4% in March) and core CPI is up 2.1% (vs +2.1% in March).
  • The key takeaway from the report is that the CPI and core CPI headlines were weaker than expected, which helped temper concerns about the potential for the Fed to be more aggressive than expected.
• The latest weekly initial jobless claims count totaled 211,000, while the consensus expected a reading of 220,000. Today's tally was unchanged from the prior week's unrevised count of 211,000. As for continuing claims, they declined to 1.790 million from a revised count of 1.760 million (from 1.756 million).
  • Since there was no change in initial claims from the prior week, it's fair to say that there was no change in the key takeaway from the report, which is that the low level of claims continues to underscore a condition of tightening supply in the labor market.
• The Treasury Budget for April showed a surplus of $214.3 billion versus a surplus of $182.4 billion for the same period a year ago.
  • The Treasury Budget data is not seasonally adjusted, so the April surplus cannot be compared to the $208.7 billion deficit for March.

On Friday, investors will receive April Import/Export Prices and the preliminary reading for the University of Michigan Consumer Sentiment Index for May (consensus 98.0).

• Nasdaq Composite: +7.3% YTD
• Russell 2000: +4.4% YTD
• S&P 500: +1.9% YTD
• Dow Jones Industrial Average: +0.1% YTD

NVIDIA beats by $0.39, beats on revs; guides Q2 revs above consensus (260.13   +4.35)

• Reports Q1 (Apr) earnings of $2.05 per share, excluding non-recurring items, $0.39 better than the Capital IQ Consensus of $1.66; revenues rose 65.6% year/year to $3.21 bln vs the $2.88 bln Capital IQ Consensus.
• Non-GAAP Gross Margins were 64.7% vs. 59.6% a year ago
• For fiscal 2019, NVIDIA intends to return $1.25 billion to shareholders through ongoing quarterly cash dividends and share repurchases.
• Co issues upside guidance for Q2, sees Q2 revs of $3.04-3.16 bln ($3.1 bln +/- 2%) vs. $2.95 bln Capital IQ Consensus Estimate; GAAP and non-GAAP gross margins are expected to be 63.3 percent and 63.5 percent, respectively, plus or minus 50 basis points.