UK markets closed
  • NIKKEI 225

    29,639.40
    -200.31 (-0.67%)
     
  • HANG SENG

    24,221.54
    +122.40 (+0.51%)
     
  • CRUDE OIL

    72.07
    +1.58 (+2.24%)
     
  • GOLD FUTURES

    1,786.60
    +8.40 (+0.47%)
     
  • DOW

    34,377.93
    +458.09 (+1.35%)
     
  • BTC-GBP

    32,125.97
    +803.11 (+2.56%)
     
  • CMC Crypto 200

    1,101.39
    +60.91 (+5.85%)
     
  • ^IXIC

    14,920.10
    +173.70 (+1.18%)
     
  • ^FTAS

    4,081.81
    +52.80 (+1.31%)
     

Nvidia forecast beats expectations, but talks on $40 billion Arm deal take longer than expected

  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
The logo of technology company Nvidia is seen at its headquarters in Santa Clara
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

By Stephen Nellis and Chavi Mehta

(Reuters) - Nvidia Corp on Wednesday said talks with regulators to clear its $40 billion proposed acquisition of British semiconductor technology firm Arm Ltd are taking longer than expected.

The disclosure came as Nvidia, the world's biggest maker of graphics chips for gamers and artificial intelligence chips for data centers, forecast third-quarter revenue above Wall Street expectations on Wednesday as it benefits from a boom in demand.

But investors have focused on whether Nvidia's move to acquire Arm will withstand regulatory scrutiny and close by March of next year as Nvidia promised. Arm has long been a neutral supplier of technology throughout the chip industry, and Nvidia competitors such as Qualcomm Inc have objected to having Arm land in the hands of a rival.

In a statement, Nvidia Chief Financial Officer Colette Kress said the company is still confident the deal will close.

"Although some Arm licensees have expressed concerns or objected to the transaction, and discussions with regulators are taking longer than initially thought, we are confident in the deal and that regulators should recognize the benefits of the acquisition to Arm, its licensees, and the industry," she said.

Nvidia shares dropped 2% but later rose as executives predicted higher selling prices for gaming chips on a conference call with analysts.

"Many investors already place a low probability on the deal ultimately being approved. If it is blocked I think it will be met with a collective shrug," said Logan Purk, analyst at Edward Jones.

The company estimated current-quarter revenue at $6.80 billion, plus or minus 2%. Analysts on average had expected $6.53 billion, according to IBES data from Refinitiv.

Nvidia also beat expectations for second-quarter revenue with a 68% rise to $6.51 billion. Data center and gaming revenue were $2.37 billion and $3.06 billion, respectively, beating analyst estimates of $2.3 billion and $2.94 billion, according to Refinitiv data.

The company said second-quarter adjusted profit was $1.04 per share, versus estimates of $1.01 per share, according to Refinitiv data.

Nvidia shares initially fell 2% in after-hours trade after release of the results but they later rose 2.8%.

(Reporting by Chavi Mehta in Bengaluru and Stephen Nellis in San Francsico; Editing by Aditya Soni, Aurora Ellis and Matthew Lewis)

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting