NVIDIA Corp will announce his financial results for the first quarter of 2021 (fiscal year 2020) after today's trading. Prior to this, Intel, AMD in the first quarter have handed over bright financial results, NVIDIA Corp naturally will not be bad.

-Editor's Note

Last week, NVIDIA Corp finally held an online GTC meeting that was postponed for 2 months. The annual GTC conference has long been a technology feast for AI developers around the world.This time NVIDIA Corp didn't let the developers wait in vain, bringing a new nuclear bomb with a 20-fold improvement in AI performance, rubbing Moore's Law on the ground.

Before the official release of NVIDIA Corp's Q1 performance, the stock price appeared the phenomenon of "snatching away".Since the March 16 stock market crash, NVIDIA Corp has rebounded by 82.69%, leading Intel and AMD by a wide margin. Especially after the GTC online meeting, NVIDIA Corp's share price rose 11.7% in four trading days.

Because NVIDIA Corp's financial report is later than Intel and AMD, Intel and AMD's financial report generally has a strong guiding significance for predicting NVIDIA Corp's financial report.

Financial report Review of Intel and AMD Q1

Intel2020 Q1 Financial report:

• Revenue was $19.8 billion, up 23% from a year earlier, compared with a previous guidance of $19 billion

• Data center revenue of US $6.993 billion, an increase of 43% compared with the same period last year and a year-on-year increase of US $9.775 billion, an increase of 14% over the same period last year.

• Gross profit margin 61%, 3pct higher than the same period last year; operating profit margin 35%, 7pct higher than the same period last year

• Net profit was 5.7 billion US dollars, an increase of 42% over the same period last year.

AMD 2020Q1 Financial report:

• Revenue was 1.786 billion US dollars, up 40% from the same period last year, down 16% from the previous month.

• Gross profit margin 46%, an increase in 5pct compared with the same period last year, reaching a new high in nearly 8 years

• Operating profit was 177 million US dollars, an increase of 366% over the same period last year.
  

• GAAP's net profit was $162 million, an increase of 913% over the same period last year.

Overall, both Intel and AMD Q1 reported better-than-expected results. In particular, Intel PC business has seen rare double-digit year-on-year growth.

In terms of data centers, Q1 Intel data center business revenue of US $6.993 billion in 2020, although not a record high, but an increase of 42.7% over the same period last year! Data center revenue accounts for 35.3%, which is still at an all-time high.And the share of pan-data center revenue is at an all-time high!

The high growth of Intel data center is also good for AMD and NVIDIA Corp. Because we believe that the current data center market is still a win-win situation.

Game business may benefit from the epidemic

NVIDIA Corp last year Q4 game business revenue of 1.491 billion US dollars per quarter, up 56.3 per cent from the same period last year, there is a gap of about 250 million US dollars from the Q4 all-time high, down 10.1 per cent from the previous month. In 2019, the gaming business had revenue of $5.518 billion, the second highest in the business's history, after Shenka GTX1060's 2018 when it swept the currency circle.

The Q1 notebook GPU and Switch are expected to decline seasonally this year, down about 5 per cent month-on-month, according to a previous earnings call.

But the sudden epidemic may benefit NVIDIA Corp's game business. Management has also revealed that demand for graphics cards is higher than expected, especially the outbreak of demand for notebooks. We optimistically estimate that the game business will be close to the level of Q1 in 2018, with year-on-year growth of more than 50%.

With the acquisition of Mellanox, the data center business has the opportunity to surpass the game business.

Mellanox, a leading provider of end-to-end connectivity solutions for servers and storage, represents InfiniBand and Ethernet interconnection devices. NVIDIA Corp announced a $6.9 billion cash acquisition of Mellanox in 2019, and the deal was finally settled in April after a lengthy global antitrust approval process.

The biggest feature of Mellanox is that it is highly consistent with NVIDIA Corp data center customers, which also means that the combination of the two has a strong synergy.In the era of the big bang in the data center, Mellanox's performance is also very eye-catching, with revenue growing for 12 consecutive quarters compared with the previous quarter. Almost every quarter in recent years has surpassed analysts' expectations. This year, Q1 has achieved the highest growth rate in history.

You can even see a lot of NVIDIA Corp's past growth in Mellanox. Lao Huang also came out with a new Mellanox product on GTC this time.

NVIDIA Corp Q1 will most likely merge Mellanox, and Mellanox will become NVIDIA Corp's third largest business. But if NVIDIA Corp merges Mellanox into the data center business, the Nvidia data center business is likely to become NVIDIA Corp's biggest business.

The game company "evolved" into AI.From this point of view, the PS that NVIDIA Corp often more than ten times is not expensive?

Expect Huang Renxun to give Q2 guidance

Referring to Intel and AMD next door, NVIDIA Corp's high growth of game business and data center business is almost certain. After the GTC conference, NVIDIA Corp redefined AI and became a well-deserved king in the field of AI. Although no one knows where the boundary of the AI market will be in the future, more people may think that it is enough to trust NVIDIA Corp.

We think there are three interesting points in NVIDIA Corp's Q1 financial report:How much can the data center grow, and will Mellanox be incorporated into the data center business? Can the game business exceed expectations? Will the outlook for the second half of the year be pessimistic?

With the pessimistic forecast of Intel in the second half of the year and the self-confidence guidance of AMD throughout the year, what about NVIDIA Corp, who is the "master of expectation management"?We'll see tomorrow.