Nvidia finally had a quarter for the gamers again
Nvidia’s former cash cow posted record sales in the first quarter, carrying the company to a sales beat.
As the AI boom continues to, well, boom and Wall Street’s lofty expectations become harder to top, Nvidia found itself relying on an old friend to push it over the edge in its first quarter: gaming.
The AI chip giant beat sales expectations by $792 million, propelled almost entirely by its gaming division, which outperformed Wall Street’s consensus by 32%.
In fact, Nvidia gaming — the company’s golden goose for the first three-ish decades of its existence — posted record sales of $3.76 billion, up a whopping 42% year over year.
According to Nvidia, gaming’s boost was driven by sales of Blackwell architecture, chips used to boost game graphics through DLSS, a both loved and reviled tech that uses AI to render games in higher resolutions. Nvidia chips are also in the soon-to-launch Nintendo Switch 2.
But let’s not get ahead of ourselves: even at an all-time high, gaming revenue was just 8.5% of Nvidia’s overall sales on the quarter. That’s a far cry from early 2022, when the segment made up 45% of total revenue and ChatGPT was nearly a year away from launch. You’d think a division plunging from 45% of revenue to 8.5% in three years would represent disastrous performance, but in Nvidia’s case, it just represents getting leapfrogged by a massive AI boom.
Nvidia’s data center revenue has grown at about 10x the rate of gaming and is up more than 800% from the same quarter two years ago.
Still, that’s not to say the gaming division isn’t a beefy business in and of itself. At $3.76 billion, the segment posted higher sales figures than the most recent overall quarterly sales of companies like Keurig Dr Pepper, Ulta Beauty, and Chipotle. The division was just a few million dollars shy of the total revenue posted by fellow semiconductor company Texas Instruments.
