Nvidia's Data Center Sales Zip Past Gaming Business For The First Time In 7 Quarters

Graphics chip maker Nvidia Corp’s NVIDIA data center unit’s quarterly revenue surpassed that of its gaming business for the first time in seven quarters, the company filings showed on Wednesday.

What Happened: Santa Clara, California-based Nvidia’s data center unit reported revenue of $3.75 billion in the first quarter ended May 1, a jump of 83% from a year ago and up 15% from the previous quarter.

The gaming business revenue was $3.62 billion for the three months ended May 1, a 31% jump from a year ago and a rise of 5.8% from the previous quarter.

“Data Center has become our largest platform, even as Gaming achieved a record quarter,” Nvidia founder and CEO Jensen Huang said.

Nvidia reported revenue of $1.75 billion for its data center unit in the second quarter of the fiscal year 2021, more than the gaming unit’s $1.65 billion revenue then.

See Also: Why Nvidia Shares Are Sliding After Hours

Why It Matters: Nvidia has been ramping up its data center business significantly while its gaming business has been disrupted by supply chain issues for months.

Nvidia had last year reported data center revenue of $10.6 billion while gaming revenue continued to be its largest business at $12.46 billion.

The chipmaker said first-quarter revenue grew 46% year-over-year to $8.29 billion, which beat the estimate of $8.12 billion, according to data from Benzinga Pro. The company reported quarterly adjusted earnings of $1.36 per share, which beat the estimate of $1.29 per share. 

The chip-maker also provided a light forecast for the current quarter, citing the Russian war in Ukraine and Covid-19 lockdowns in China.

Nvidia had last year reported data center revenue of $10.6 billion while gaming revenue continued to be its largest business at $12.46 billion.

Price Action: Nvidia shares traded 4% lower at $162.8 in the premarket session on Thursday.