PCs? Eh, who needs 'em? Nvidia asks while hoovering up more cash

Graphics chip biz talks up investments in VR and AI after record quarter

Nvidia says its last quarter set record high marks for revenues, as returns were up across the board.

For the second quarter of fiscal 2017 – the three months to July 31 this year – the California-based GPU specialists logged:

  • Revenues of $1.43bn, a 24 per cent increase over last year's $1.15bn.
  • Net income of $253m was up 873 per cent over $26m in Q2 fiscal 2016, when the company took big hits to its bottom line thanks to write-downs and restructuring costs.
  • Earnings per share of 40 cents topped analyst estimates of 37 cents.
  • Gaming hardware revenue of $781m was up 18 per cent on the year.
  • Professional systems revenue of $214m, up 22 per cent on Q2 fiscal 2016.
  • Data center hardware revenue of $151m was more than double the year-ago quarter's return, a gain Nvidia credits to growth in supercomputing and hyperscale system sales.
  • Automotive unit revenues were $119m, up 68 per cent year-over-year.

Sales of graphics chipsets for PCs and workstations remain strong. Having said that, CEO Jen-Hsun Huang talked up the growth in the new markets as an area that will begin to pay off on Nvidia's bottom line over the coming months. In particular, there is a demand for GPUs that accelerate machine-learning applications in servers and internet-connected gadgets, and Nv has been heavily touting kit for those systems.

"We are more excited than ever about the impact of deep learning and AI, which will touch every industry and market. We have made significant investments over the past five years to evolve our entire GPU computing stack for deep learning," Huang said.

"Now we are well positioned to partner with researchers and developers all over the world to democratize this powerful technology and invent its future."

Analysts are sharing Huang's optimism for growth, particularly in the data center and hyperscale computing markets that use Nvidia GPUs to accelerate AI and scientific workloads.

"All these hyperscale guys that are pursuing machine learning are using GPUs to do that," Gartner research vice president Mark Hung told us. He thinks that Nvidia could find itself with enough of a push in those markets to take on Chipzilla itself.

"Nvidia has succeeded in taking a different approach to other ARM vendors, by not taking Intel on heads on, but really making their GPUs much more effective for these new machine learning algorithms."

Nvidia shares were up three per cent after hours at $61.49. ®

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