Nvidia Corp., a maker of graphics chips, rose the most in more than five months after market share gains contributed to a higher-than-estimated sales forecast.
Third-quarter revenue will rise 4 percent to 6 percent from the second quarter, indicating sales of as much as $1.08 billion, Santa Clara, California-based Nvidia said yesterday in a statement. That compares with the $1.05 billion predicted by analysts on average, according to Bloomberg data.
Nvidia is wooing customers away from Advanced Micro Devices Inc. in the market for so-called discrete graphics chips, which are used in notebook computers, according to Mercury Research analyst Dean McCarron. The company has also started winning more orders for its Tegra processors from makers of mobile phones.
“Things really changed during the last month of the quarter,” said Patrick Wang, an analyst at Evercore Partners Inc. in New York. He has an “underweight” rating on the shares. “They were really aggressive in shipments of discrete graphics chips for desktops.”
Nvidia gained 58 cents, or 4.3 percent, to $13.99 at 9:51 a.m. New York time on the Nasdaq Stock Market, after earlier touching $14.86 for the biggest intraday gain since February. The shares had declined 13 percent this year before today.
Nvidia said earlier this week that Samsung Electronics Co. will use the Tegra 2 processor in its new Galaxy R smartphone. That’s the first time Samsung will sell a phone sporting an Nvidia chip.
Nvidia Chief Executive Officer Jen-Hsun Huang is aiming to lessen Nvidia’s dependence on chips used in PCs with a push into processors for mobile phones and tablet computers. That business, based on Tegra, has also won him orders from LG Electronics Inc. and Motorola Mobility Holdings Inc.
“We have an opportunity to gain share in both notebook and desktop, but probably the most important thing is that the graphics processor market is still robust,” Huang said in a telephone interview. Markets outside the U.S. have a much higher rate of graphics chip use in PCs, he said.
Net income in the second quarter was $151.6 million, or 25 cents a share, compared with a loss of $141 million, or 25 cents, a year earlier, the company said in the statement. Sales in the period that ended July 31 rose 25 percent to $1.02 billion. Analysts on average had predicted profit of $156.1 million, or 25 cents a share, on sales of $1 billion.
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