(Reuters) -Chip designer Nvidia Corp beat expectations for third-quarter revenue on Wednesday, thanks to sustained demand in its data center business on the back of rising cloud adoption.
Shares of the company rose 3% in extended trading. They have declined roughly 43% so far this year, underperforming the Philadelphia SE Semiconductor index amid an industry downturn and a broader sell-off in the technology sector.
“We are quickly adapting to the macro environment, correcting inventory levels and paving the way for new products,” said Chief Executive Jensen Huang.
Nvidia’s A100 data center chip and ramp-up in its “Hopper” series will help the company maintain its momentum in the data center space.
Cloud companies are increasingly using Nvidia chips in their systems. Microsoft is working with the company to build a “massive” computer to handle intense artificial intelligence computing work in the cloud.
As of August, Nvidia’s market share of so-called accelerator chips inside the world’s six biggest clouds’ infrastructure grew to 85%, according to a note by brokerage Jefferies in October.
While U.S. export restrictions have been a cause for worry, Nvidia’s production of a downgraded iteration of the A100, called A800, which complies with recent export control rules, has been a bright spot as it could help lessen the financial blow.
Moreover, Nvidia has been clearing piled-up inventory to make room for new product launches including gaming graphics chips series “Ada Lovelace”.
The company forecast revenue of $6 billion, plus or minus 2%. Analysts on average expect revenue of $6.09 billion, according to Refinitiv data.
The company’s adjusted revenue for the quarter ended Oct. 30 was $5.93 billion. Analysts on average had expected revenue of $5.77 billion, according to Refinitiv data.
(Reporting by Chavi Mehta in Bengaluru; Editing by Maju Samuel)
