NVIDIA revenue jumps after strong gaming and automotive chip demand

Nvidia has reported an unexpected rise in its second quarter revenue due to strong demand for its graphics chips and for mobile SoCs from the automotive industry.

Total revenue for the company rose by 4.5 percent to $1.15 billion in the latest quarter. NVIDIA is also forecasting revenue of $1.16 to $1.20 billion for Q3 2015, which is higher than the $1.10 billion that it had anticipated for the quarter.

The decline of PC sales had been expected to hurt NVIDIA’s revenue, as the company remains heavily reliant on desktop graphics card and laptop sales, and these still make up the majority of the company’s revenue. However, NVIDIA has seen an uptick in GPU sales, along with strong demand from the automotive industry.

Revenue from the company’s gaming business rose by 9 percent in the previous quarter, which includes Android hardware and GRID streaming business. The desktop graphics unit also appears particularly strong lately, with a 51 percent increase in revenue. NVIDIA remains a small player in the mobile SoC space, with only a handful of modern products powered by its Tegra SoCs. Its new Shield Android TV is rather good and NVIDIA is also betting big on its GRID game streaming service, which has seen its user base triple over the last year.

Nvidia’s mobile chips are proving most popular in the automotive industry, powering car dashboard displays and entertainment systems. The company is also in talks with more than 50 companies that are exploring its Drive chip for self-driving cars. NVIDIA’s Drive chip is based on the company’s latest Tegra X1 processor and offers powerful image processing capabilities for driver assistance systems, along with a fully featured infotainment experience.

It seems that diversification away from its core GPU business is working out quite well for NVIDIA.