GPU giant Nvidia’s datacenter division fell short of analyst estimates, according to the company’s latest quarterly financial results, driving a 6.6% dip in share prices.
Despite revenues rising across all the company’s divisions for Q2 2017, Reuters reports that the firm’s datacenter business, which uses its GPU technology for machine learning, artificial intelligence and high-performance computing tasks, missed analyst estimates by $US7.3 million according to data analytics firm FactSet.
The stiff competition in the data centre market, with companies regularly changing their suppliers has been suggested by Bernstein analyst Stacy Rasgonas a potential factor for Nvidia’s dip in data centre revenues.
Although the company’s shares have dropped slightly, the company’s performance over the last 12 months has been exceptional, with share prices almost tripling over that period.
“Adoption of NVIDIA GPU computing is accelerating, driving growth across our businesses,” said Jensen Huang, founder and chief executive officer of NVIDIA. “Datacenter revenue increased more than two and a half times. A growing number of car and robot-taxi companies are choosing our DRIVE PX self-driving computing platform. And in Gaming, increasingly the world’s most popular form of entertainment, we power the fastest growing platforms – GeForce and Nintendo Switch.
“Nearly every industry and company is awakening to the power of AI. Our new Volta GPU, the most complex processor ever built, delivers a 100-fold speedup for deep learning beyond our best GPU of four years ago. This quarter, we shipped Volta in volume to leading AI customers. This is the era of AI, and the NVIDIA GPU has become its brain. We have incredible opportunities ahead of us,” he said.
The company’s overall revenue has almost doubled in the past year, driven mainly by strong increases in revenues from its gaming, datacenter, and OEM divisions, which grew by a collective total of $US758 million.
Revenue is expected to swell to $US2.35 billion for the third quarter, an increase of $US120 million over the current figures. However, this is less than half the revenue growth experienced last quarter, which saw overall revenues from by almost $US300 million.
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