Why Shares of NVIDIA Rose Last Week
NVIDIA beats analysts’ estimates in 1Q17
Shares of NVIDIA (NVDA) rose 23% in the week ended May 12, 2017. The company reported revenue of $1.94 billion, compared to analysts’ consensus estimate of $1.91 billion.
NVDA’s earnings per share (or EPS) were $0.85, significantly higher than analysts’ estimate of $0.66. While NVDA’s revenue rose 48% YoY (year-over-year), its EPS rose 85% YoY in 1Q17.
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Despite lower revenue from the video game market, NVIDIA posted healthy revenue due to its strong sales in the data center and automotive markets. Its revenue from its Video Game segment rose 49% YoY to $1.0 billion after falling 24% YoY in 4Q16. Its Data Center segment’s revenue also beat expectations and rose to $409 million. In 2Q17, the company expects to garner revenue of $1.95 billion.
NVIDIA has successfully moved from a GPU (graphics processing unit) model to a GPU platform–based business model. In key growth areas such as autonomous cars, AI (artificial intelligence), and gaming, it’s currently ahead of its peer companies such as AMD (AMD) and Intel (INTC).
Shares have increased over 500% in the last two years
Shares of NVIDIA rose from $21.29 in May 2015 to $134.31 on May 15, 2017, a phenomenal return of 530% in the last two years. NVIDIA shares rose 227% in 2016, and they’ve risen 260% in the trailing-12-month period.