Nvidia stock rallies toward record after revenue outlook raised

Nvidia shares gained after Chief Executive Jensen Huang announced at its annual GTC developers conference Monday morning that the chip maker was launching its first data-center central processing unit, or CPU — as opposed to its core graphics processing unit, or GPU, product — based on Arm Holdings PLC technology, upping its competition against rivals Intel Corp.
INTC,
-4.29%
and Advanced Micro Devices Inc.
AMD,
-5.60%

Don’t miss: Nvidia steps up competition with Intel and AMD with first data-center CPU, based on Arm

Gains accelerated later in the day, after the company revealed that fiscal first quarter revenue is tracking above its $5.3 billion forecast. In late February, Nvidia had forecast revenue between $5.19 billion and $5.41 billion. Analysts surveyed by FactSet expect $5.32 billion. Nvidia Chief Financial Officer Colette Kress said that revenue was “tracking above the $5.30 billion outlook provided during our fiscal year-end earnings call,” but did not provide a specific new target.

“Within Data Center we have good visibility, and we expect another strong year. Industries are increasingly using AI to improve their products and services,” Kress said in a statement. “We expect this will lead to increased consumption of our platform through cloud service providers, resulting in more purchases as we go through the year. “

Nvidia also said it expects first quarter revenue of $150 million for its cryptocurrency mining chips, up from a previously expected $50 million.

Most of the chip sector was trading lower Monday, as the PHLX Semiconductor Index
SOX,
-1.27%
down 1.3% as the S&P 500 index
SPX,
-0.06%
was down 0.1%. Over the past 12 months, Nvidia stock is up 131%, while the SOX index is up 103% and the S&P 500 is up 48%.