For the second quarter in a row, Nvidia  (NVDA – Get Report) cleared a pretty high bar on the back of torrid demand from gamers, AI developers, supercomputer users and cryptocurrency miners. And this time around, the company followed up by sharing some intriguing details about the long-term opportunities presented by a couple of AI-related businesses that for now are relatively small, as well as how AI/machine learning solutions are providing a boost to a pair of established businesses.

Nvidia reported January quarter (fiscal fourth quarter) revenue of $2.91 billion (up 34% annually) and adjusted EPS of $1.72, easily beating consensus analyst estimates of $2.68 billion and $1.16. And for what’s normally a seasonally weak April quarter, the GPU giant guided for $2.9 billion (plus or minus 5%), far above a $2.46 billion consensus and implying 49% growth at the midpoint.

As usual, no earnings guidance was given. But between the revenue guidance, a forecast for a gross margin of 62.5% to 63.5% (up from 58.6% a year earlier) and (thanks to tax reform) expectations for a tax rate of 11% to 13%, odds are EPS will be well above a $0.98 pre-earnings consensus.

Shares exploded 10% in pre-market trading on Friday.

Jim Cramer and the AAP team hold a position in Nvidia for their Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells NVDA? Learn more now.

Contributing heavily to the January quarter beat: Nvidia’s Gaming segment revenue (60% of total revenue) rose 29% to $1.74 billion, topping a $1.57 billion consensus. The growth came in spite of tough annual comps: Gaming revenue was up 66% in the year-ago period, as the launch of Nvidia’s first Pascal-architecture gaming GPUs fueled a graphics card upgrade cycle.


Read more: https://www.thestreet.com/story/14481773/1/nvidia-cleared-a-high-bar-and-signaled-it-has-plenty-of-growth-left.html

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