Hot Tech stock to watch: NVIDIA Corporation (NASDAQ: NVDA)

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NVIDIA Corporation (NASDAQ: NVDA) stock surged over 6.5% on 14th Feb, 2020 (As of 10:25 am GMT-5; Source: Google finance) as the company posted better than expected results for the fourth quarter of FY 20. The company has reported 68% rise in the net income to $950 million. In its fourth quarter of 2020, NVDA has posted $1.49 billion revenue from Gaming, $331 million from Visualization $968 million from Datacenter, $163 million from Auto and $152 million from all other operational areas combined. The revenue from the gaming segment was up 56% year-on-year and down 10% sequentially. The decline in Gaming revenue reflects slower sales of mobile and system-on-chip gaming platforms. Full year gaming revenue was $5.52 billion, which reflects the decline of 12% from the prior year. The company enjoyed strong end demand for the desktop and notebook GPUs. The company’s gaming lineup was exceptionally well positioned for the holidays, with the unique ray tracing capabilities of the RTX GPUs and incredible performance at every price point. From the Singles Day shopping event in China, through the Christmas season in the West, channel demand was strong for the entire stack. In addition to this were new blockbuster games like Call of Duty: Modern Warfare, continued esports momentum and new RTX SUPER products. With RTX price points as low as $299, ray tracing is now the sweet spot for PC gamers. Gaming is performing strongly and gamers prefer GeForce.

NVDA in the fourth quarter of FY 20 has reported the adjusted earnings per share of $1.89, beating the analysts’ estimates for the adjusted earnings per share of $1.67. The company had reported the adjusted revenue growth of 41 percent to $3.11 billion in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $2.97 billion.

For the first quarter, the company expects revenue to be of $3.0 billion, plus or minus 2%, while the consensus estimates $2.85 billion. The operating expenses are projected to be $1.05 billion and capital expenditures are expeccted to be in the range of $150-170 million for the first quarter. The guidance does not include any contribution from the pending acquisition of Mellanox.

The pending acquisition of Mellanox is currently progressing smoothly. The discussions with China’s regulatory agency, the State Administration for Market Regulations, are progressing and the company anticipates that the acquisition will close in the early part of the calendar 2020.

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