Nvidia Stock

Nvidia says gaming market conditions are 'challenging,' Q3 forecast misses · Nvidia reported second quarter earnings that missed Wall Street expectations for ...

Nvidia said that the miss was because of lower sales of its gaming products, which are primarily graphics cards for PCs. Since then, Nvidia has said it doesn’t have visibility into how much cryptocurrency affects the demand for its products, even as cryptocurrency prices have plunged this year. It had been a pandemic darling, rising heavily as work-from-home prompted purchases of graphics cards and server chips, supercharging Nvidia’s business and driving 61% revenue growth in fiscal 2022. Its professional visualization business, which sells graphics chips for enterprise uses, declined 4% annually to $496 million. Nvidia stock fell over 4% in extended trading. It also warned its gross margin would drop.

Nvidia posts dismal earnings results, which have no negative effect on its stock prices. Here's what this means for the data center semiconductor market.

“That’s when you can take a look at the stock and say 35 times earnings is a great buy.” 8 warning, the stock was the most popular among mom-and-pop investors, according to Vanda Research. Yet it’s still priced at 35 times projected earnings, rich both historically and compared with peers, especially at a time when revenue growth is expected to slow.

Fiscal third-quarter revenue will be about $5.9 billion, the company said late Wednesday in a statement. That compares with an average analyst estimate of $6.92 ...

[Fiscal third-quarter](/quote/NVDA:US) revenue will be about $5.9 billion, the company said late Wednesday in [a statement](/news/terminal/RH4Z6M33O5C0). [Nvidia Corp.](/quote/NVDA:US), which warned earlier this month that its sales were slipping, gave a disappointing forecast for the current period that added to [signs of weakness](https://www.bloomberg.com/news/articles/2022-08-16/chipmakers-pandemic-boom-turns-to-bust-with-recession-looming) in the semiconductor industry.

Graphics-chip maker Nvidia (NVDA) late Wednesday matched reduced targets for its fiscal second quarter but guided much lower than views for the current ...

Analysts had predicted $6.91 billion in revenue for the fiscal third quarter. [Nvidia slashed its targets](https://www.investors.com/news/technology/nvidia-stock-falls-as-graphics-chip-maker-warns-of-weak-gaming-sales/) for the fiscal second quarter, citing weak gaming-chip sales. Nvidia's data center chip business remains a bright spot for the company. Sales channel partners are reducing inventory to align with lower demand, the company said. The Santa Clara, Calif.-based company earned an adjusted 51 cents a share on sales of $6.7 billion in the quarter ended July 31. During the regular session Wednesday, NVDA stock inched 0.2% higher to close at 172.22. On a year-over-year basis, Nvidia earnings plummeted 51% while sales rose 3%. Sales in the segment rose 61% year over year to $3.81 billion in the second quarter. It announced preliminary sales of $6.7 billion vs. Nvidia sees continued weakness in its video game chip business in the current quarter. For the current quarter, Nvidia predicted revenue of $5.9 billion, down 17% from the year-earlier quarter. [NVDA](https://research.investors.com/quote.aspx?symbol=NVDA)) late Wednesday matched reduced targets for its fiscal second quarter but guided much lower than views for the current period.

The company reported net income for the second quarter of just $656 million, way down from the $2.37 billion profit it recorded a year earlier. Earnings before ...

“The question is, where will the growth come from in the next quarters, and will Nvidia be able to reignite its gaming sales?” Meanwhile, she said she expects Nvidia’s customers and channel partners to reduce their inventory levels to align with current levels of demand and prepare for the company’s new products generation. The forecast means that Nvidia is likely to report quarterly sales lower than rival chipmaker Advanced Micro Devices Inc. In a conference call, Nvidia Chief Financial Officer Colette Kress said the decline in gaming sales was “sharper than anticipated,” driven by both lower unit sales and lower average selling prices.” She added that macroeconomic headwinds resulted in a “sudden slowdown” in demand for gaming hardware. “We expect that decline to be partially offset by sequential growth in automotive,” Kress added. “Nvidia’s main problem spots are in crypto mining, where cryptocurrencies have failed to regain momentum after their recent collapse, and gaming systems, where slowing sales reflect consumers’ concerns about inflation and economic uncertainties,” King said. “I think Wall Street didn’t like the answers on the call related to when gaming will rebound,” he added. The company reported that data center chip sales rose 61% in the quarter, to $3.81 billion. The problem was that gaming sales fell 33%, to just $2.04 billion. The unit, which sells graphics chips for enterprise use cases, saw sales drop 4% to $496 million. [reported](https://nvidianews.nvidia.com/news/nvidia-announces-financial-results-for-second-quarter-fiscal-2023) net income for the second quarter of just $656 million, way down from the $2.37 billion profit it recorded a year earlier. It further warned that COVID-19-related lockdowns in China and the war in Ukraine would knock an additional $500 million off its balance sheet.

The semiconductor company reported adjusted earnings per share of 51 cents for the July quarter, compared with the consensus estimate of 50 cents among analysts ...

[ ](https://www.barrons.com/market-data/stocks/fds) ](https://www.barrons.com/market-data/stocks/nvda)

Analysts continue to bet on Nvidia despite a disappointing quarter, with some believing that its weak forward guidance shows signs of a potential bottom.

"Overall, we are surprised by the magnitude and duration of the correction in Gaming (deeper/longer than the correction in 2019), but believe the more significant concern for investors to be the potential cracks in its Data Center business," wrote Deutsche Bank's Ross Seymore. Timothy Arcuri of UBS echoed Kumar's sentiment, noting that the correction in the gaming industry is "largely in the rear-view mirror." Despite the findings, Piper Sandler maintained its overweight rating on the stock, noting that a revenue bottom should come in the October quarter as the company launches a slew of new products that could boost revenues ahead.

Nvidia shares slumped lower Thursday after the chipmaker posted weaker-than-expected second quarter earnings Wednesday and forecast more gaming sector ...

"The fundamentals of gaming are strong, and this medium is really doing well," he said. "Macroeconomic headwinds across the world drove a sudden slowdown in consumer demand. Group revenues, Nvidia said, rose 3% from last year to $6.7 billion, a figure that was largely in-line with the chipmaker's pre-announcement in early August but was down 19% from the three months ending in April. We are unable to accurately quantify the extent to which reduced crypto money contributed to the decline in Gaming demand." Gaming weakness, Nvidia said, would be partly offset by firmer demand in its automotive and data center businesses. Data center revenues were pegged at $3.81 billion, Nvidia said, a 61% increase from last year.