Nvidia posted record-breaking net income and revenues in the second quarter of fiscal 2022. Revenue jumped 68% to $ 6.51 billion from $ 3.87 billion a year earlier. Net income for the quarter ended Aug. 1 nearly quadrupled to $ 2.37 billion, or $ 0.94 per share, from $ 622 million, or $ 0.25 per share, in the prior year’s comparable period. Adjusted earnings rose to $ 1.04 per share from $ 0.55. According to market consensus, the company’s adjusted earnings were expected at $ 1.02 per share on revenue of $ 6.33 billion. The company itself forecast revenue in May in the range of $ 6.17 billion to $ 6.43 billion. Nvidia expects to receive revenue in the third financial quarter. the level of $ 6.66 billion – $ 6.94 billion. The consensus forecast assumes $ 6.57 billion.
We were pleasantly surprised by the dynamics of the company’s financial indicators, so we raised the target valuation of the share price from $ 176.5 to $ 220. Nvidia continues to maintain its dominant position in the global GPU market. We appreciate the transformation of the company. From a supplier of GPUs for PCs, Nvidia is evolving into a multifunctional company that is capable of solving problems for different sectors of the economy. With the ongoing digitalization of the corporate sector, demand for Nvidia products will remain strong. That said, the continued development of AI-powered cloud and enterprise applications, as well as PC games, should help Nvidia increase sales in fiscal 2022.
The A100 datacenter performance-enhancing platform and new RTX Ampere GPUs for gaming PCs will remain key drivers of business growth in 2022 and will remain drivers in the long term. The impact of cryptocurrency on business remains volatile, but is likely to be at least $ 800 million per year. The upcoming purchase of ARM, as well as the launch of the ARM server processor, are key catalysts in the long term. The deal propels Nvidia into the Intel and AMD markets. However, we believe that the deal could take longer due to closer scrutiny by the regulatory authorities.
NVIDIA invented the GPU, originally focused on serving as the graphics engine in PCs. The company has recently extended GPU applications to the field of Artificial Intelligence, virtual reality, and high-performance computing. NVIDIA has a platform strategy to bring together hardware, system software, programmable algorithms, libraries, systems, and services to add value in its markets served. Current target markets include: gaming, automotive, datacenter, professional visualization, PC OEMs, and embedded applications.