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NVDA Stock Doesn’t React to Nvidia Report of Better Than Anticipated Q1 2022 Earnings

UTC by Steve Muchoki · 2 min read
NVDA Stock Doesn’t React to Nvidia Report of Better Than Anticipated Q1 2022 Earnings
Photo: NVIDIA

During the first quarter, Nvidia’s graphics sector brought in a $3.45 billion revenue representing an 81% rise while crypto miners’ demand brought in $155 million.

Nvidia Corporation (NASDAQ: NVDA) stock had risen to $630.06 (0.52%) during Thursday’s pre-market session and was 0.16% down at the time of writing. The tech company has shown a steady increase in performance with records of 7.44%, 2.45%, 17.98%, and 20.26% in 5 days, 1 month, 3 months, and YTD respectively according to metrics provided by MarketWatch. During the Q1, Nvidia recorded an impressive 83.8% massive growth in sales despite the global semiconductors shortage. Additionally, the firm reported a spike in revenue in comparison to the prior quarter.

Nvidia and Q1 Earnings

Nvidia Q1 earnings hit a record for FY 2022 from its gaming, professional visualization solutions, and data center rising at 106%, 21%, and 79% respectively. Wall Street analysts had predicted $3.30 EPS and a $5.4 billion revenue but the company surpassed this by a wide margin to achieve $3.66 EPS and $5.7 billion revenue.

The company recorded a gross margin of 66.2%, the highest in the past four years, contrary to analysts’ prediction of 65.8%. In the past year, returns from the firm’s shares were 80.3% which was higher than 40.3% of the S&P 500 total return.

During the first quarter, the company’s graphics sector brought in a $3.45 billion revenue representing an 81% rise while crypto miners’ demand brought in $155 million. Reportedly, the video game sector’s demand more than doubled in the past year leading to $2.76 billion in sales and 106% annual growth.

Earlier this year Nvidia integrated software to enable cryptocurrency mining using its GPUs. CEO Jensen Huang noted that the move would save gamers since GPUs can be used for both mining and gaming. It would also uphold the company’s core business which is gaming processor manufacturing.

Despite the celebratory earnings, the company predicts that there will be a further shortage of its products in the second half of this year. However, to cater to the reduced demand of its GPUs among miners, CEO Jensen Huang has predicted the production of CMP chips specifically for crypto mining.

Early this year, the company faced a heated lawsuit when it was just about to launch the Crypto SKU units for specialized crypto mining. Shareholders argued that investors were misled that half of the firm’s GPU sales would be to crypto miners. This, therefore, led to inaccurate speculations in GPU demand from gamers when the crypto market turned bearish. The firm eventually won the case in March.

Forward, the company predicts a further rise in revenue to about $6.3 billion in Q2 and a gross margin of around 66.5%.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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