Nvidia Shines in Q1 Despite Near-Term Pressure
Nvidia Corp. (NASDAQ: NVDA) released fiscal first-quarter financial results after markets closed Thursday. The firm said that it had $0.88 in earnings per share (EPS) and $2.2 billion in revenue, compared with consensus estimates that called for $0.79 in EPS and $2.2 billion in revenue. The same period from last year had $2.05 in EPS and $3.21 billion in revenue.
During the quarter, Nvidia announced that it reached a definitive agreement to acquire Mellanox Technologies for $125 per share in cash, representing a total enterprise value of approximately $6.9 billion. Once complete, the combination is expected to be immediately accretive to Nvidia’s gross margin, EPS, and free cash flow. The transaction is expected to close by the end of the calendar year.
Looking ahead to the fiscal second quarter, the company expects to see revenues of $2.55 billion, give or take 2%, with a gross margin of 59.5%. Consensus estimates are calling for $1.11 in EPS and $2.54 billion in revenue for the fiscal second quarter.
Jensen Huang, founder and CEO, commented:
Despite the near-term pause in demand from hyperscale customers, the application of AI continues to accelerate. AI adoption is accelerating in the world’s largest industries, moving beyond the cloud to the edge where AI processing has to be instantaneous. We’re excited about our pending acquisition of Mellanox, which will help us drive data center architecture for high performance computing and AI from the cloud to the edge.
Shares of Nvidia closed Thursday at $160.19, with a 52-week range of $124.46 to $292.76. The stock has a consensus analyst price target of $187.71. Following the announcement, the stock was up about 5% at $167.76 in the after-hours session.