Are NVIDIA Corp. (NVDA)’s Financials Now A Value Play?

NVIDIA Corp. (NASDAQ: NVDA), a manufacturer of graphics chips (GPU), released a report last week that again showed record revenue. Some investors were concerned about NVIDIA’s forecast and the decline in the cost of bitcoin. How significant are these aspects?

In the first quarter of 2022, NVDA increased revenue by 46% year-on-year to $8.29 billion. The main drivers were sales of graphics processing units (GPUs) for data centers and solutions for gamers. At the same time, GAAP profit decreased by 16%, to $0.64, but this is due to the payment for the acquisition of Arm.

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NVIDIA Corp. (NVDA) estimates $8.1 billion in revenue in the second quarter of this year, which is lower than Wall Street’s average expectation of $8.45 billion. NVIDIA did not say how much of their income and earnings come from cryptocurrency mining solutions, but they did say that they expect GPU mining revenues to decline in the future.

The reduction in the price of bitcoin and other cryptocurrencies has resulted in lower demand for video cards, which will almost surely damage NVIDIA’s profit in the second quarter. True, video cards have grown more inexpensive for gamers, and NVIDIA Corp. (NVDA) is already seeing an increase in sales in this area.

In fact, since the same video cards are used for gaming and mining, this is just one segment. NVIDIA Corp.’s (NVDA) bulk mining sales were presumably easier to deploy and more cost-effective. However, there is a lot of pent-up demand among gamers, so video cards should sell well.

It’s critical that NVIDIA Corp. (NVDA) does well in the data centre GPU area. Machine learning and other high-performance computers continue to be in great demand. The data centre category grew revenues by 83 percent year over year in the last quarter. It’s a significant part of NVIDIA’s business, and it’ll continue to grow for the next decade.

The stock of NVDA closed at $186.72 the last session, down -0.74 percent or $1.39. Throughout the day, the company’s stock traded between $183.50 and $192.00. The company’s stock has lost 14.80 percent in the previous year but has gained 10.50 percent in the last week.


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