Gaming and deep learning continue to drive graphics chip maker Nvidia Corp., which today released its best quarterly earnings ever, beating fourth-quarter expectations and hitting a record $2.17 billion in revenues.
The maker of graphics processing unit chips, or GPUs, saw revenues jump 55 percent from a year ago. Nvidia also posted an impressive gross margin of 60 percent. This marks the seventh consecutive quarter Nvidia beat earnings expectations.
Still, investors may have wanted a bit more, especially in the company’s first-quarter outlook, which also beat forecasts but perhaps not as much as hoped. Nvidia, whose stock performed best among S&P 500 companies last year with a return of 227 percent, saw its shares vacillate up and down a fraction in after-hours trading, after falling nearly 2 percent in regular trading, to $116.38.
Nvidia called out strong adoption of its Pascal GPU chip architecture, which hit the market last year. Nvidia’s gaming GPU business alone brought in over $1.34 billion in the fourth quarter, and during today’s earnings call, Chief Executive Jen-Hsun Huang said that the personal computer gaming market is still going strong and continues to be one of the company’s core businesses. Huang credited the rise of esports, which is projected to become a $1.4 billion industry by 2019, with the continued growth of gaming, calling it “a dynamic that nobody ever expected 20 years ago.”
Perhaps even more impressive, the company’s data center segment more than tripled in 2016.