Chipmaker Nvidia reported a better-than-expected quarterly profit, as well as its fastest sales growth in nearly five years, powered largely by strong demand for the company’s processors used in gaming computers.
The company’s shares rose 4.5% to $62.40 after-hours on Thursday. They hit a record high of $59.95 in regular trading.
Nvidia (NVDA) also forecast revenue to increase to $1.68 billion, plus or minus 2%, in the current quarter from $1.31 billion a year earlier. Analysts had expected a rise to $1.45 billion, according to Thomson Reuters.
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Revenue from its gaming business, which makes chips that render graphics in video games, rose 18.3% in the second quarter ended July 31.
The division accounts for more than half of the company’s total revenue.
Nvidia has emerged as a preeminent player in the high-end PC gaming market, where its chips power graphics for popular video games such as “Grand Theft Auto” and “Call of Duty.” The business is also benefiting from the rising popularity of e-sports, or competitive games played for big prize money.
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The company’s dominance in the fast-growing business has also helped weather the prolonged slump in the personal computer market, which has hurt chipmakers including Intel (INTC), the world’s biggest chipmaker.
Revenue rose to a record $1.43 billion from $1.15 billion.
The company’s net income soared to $253 million, or 40 cents per share, in the latest quarter from $26 million, or 5 cents per share, a year earlier.
Analysts on average had expected a profit of 37 cents per share and revenue of $1.35 billion, according to Thomson Reuters.