Moody's Investors Service (Moody's) upgraded the senior unsecured rating of NVIDIA Corporation (NVIDIA) to A2 and short term rating to Prime-1 following the company's announcement that it has agreed to acquire Arm Limited (unrated) for approximately $40 billion from SoftBank Group Corp. (SBG) and the SoftBank Vision Fund. The upgrade reflects Moody's "expectations that NVIDIA will continue its strong operating performance and further diversify its revenue base while maintaining conservative financial policies and practices", said Moody's lead analyst, Richard Lane.
Long gone are the days of NVIDIA (NASDAQ: NVDA) the "video game company." In the graphics processing unit (GPU) pioneer's first quarter of fiscal 2021 (the three months ended April 26, 2020), another segment was nearly as large as video games: data centers. With the long-awaited purchase of Mellanox closing on the first day of Q2, data centers could wind up being the largest reporting segment at NVIDIA from this point forward.
Nvidia delivered strong Q1 2021 results, where its revenue was up 39% compared with the same period a year ago.