Nvidia stock bounces back after 4Q earnings beat on strong server sales

Nvidia Corp (NASDAQ:NVDA) continued to rally Friday in premarket trade after posting fourth-quarter earnings that beat analysts’ forecast, thanks to strong server sales.

The chipmaker posted earnings per share of $0.80 on revenue of $2.21 billion. The average forecast was for $0.75 on revenue of $2.20 billion.

Shares in Nvidia rose nearly 5.7% to 163.38.

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The chipmaker predicted that revenue would stay flat this year — better than what analysts were forecasting.

For the year, Nvidia said it expects “flat to down slightly” revenue, compared with the $11.72 billion it reported for fiscal 2019. This allayed the market’s worst fears as analysts polled by Refinitiv were expecting a decline of 7% from 2019.

Nvidia CFO Colette Kress told analysts on the earnings conference call that the company expects inventory to return to normal levels by the end of the first quarter.

“We believe that normalized quarterly gaming business revenue run rate is approximately $1.4 billion,” Kress said. “As we look past Q1 we expect the channel inventory correction to be behind us and our business to have bottomed.”

Nvidia is a component in the ROBO Global Robotics & Automation Index, the world’s first benchmark index to track companies that focus on robotics, automation and artificial intelligence.

ROBO Global provides its expertise to the ROBO Global Robotics and Automation Index ETF (NYSEARCA:ROBO), which was up slightly at $37.77.

Contact Uttara Choudhury at [email protected]

Follow her on Twitter: @UttaraProactive 

Story by ProactiveInvestors