Nvidia 2Q - Good growth in all divisions

Computer chip-maker Nvidia released a very strong set of numbers for the 2Q on Thursday, but the share closed down 4.9% because of lower-than-expected guidance. The Santa Clara based company saw record revenues across all platforms; Datacenters, Gaming, Professional Visualisation, and Automotive.

The revenues for the second quarter soared 40% year-on-year to $3.12 billion and earnings per share soared 91% year-on-year to $1.76. Jensen Huang, founder and CEO of Nvidia said the following about the growth drivers:

"Growth across every platform - Artificial Intelligence, Gaming, Professional Visualisation, self-driving cars - drove another great quarter. . .fuelling our growth is the widening gap between demand for computing across every industry and the limits reached by traditional computing. Developers are jumping on the GPU-accelerated computing model that we pioneered for the boost they need."

Nvidia expects to post $3.25 billion for the third-quarter, give or take 2 percent. According to Thomson Reuters, this came short of analysts expectations of $3.34 billion for that period. Management expects a negligible contribution from crypto-specific products going forwards, and in the second-quarter crypto mining had a 70% sequential drop. To be fair, crypto was a nice-to-have at the time. But core revenue drivers are still growing comfortably at double-digits.

During the U.S. Department of Energy's Summit, Nvidia announced that it's chips are part of the world's fastest supercomputer. Earlier in the week Nvidia announced the next generation of its graphics cards called Turing, after Alan Turing the British genius who hacked into German communications during the second world war which my colleague Byron wrote about. These chips are the world's first ray-tracing GPU, the ability for the chip to simulate how light rays bounce around in a visual scene.

The company is still without a doubt a pioneer in powerful computing, a rapidly growing sector. However, this growth comes at a high price because the company trades at a forward price-to-earnings of 32.2 times, the number is unwinding as profits grow faster than the share price. We like the company, and we think it's one to consider for portfolios that are already well diversified.