nvidia: Nvidia warns of lower second-quarter revenue on gaming weakness 

Nvidia Corp recently warned its second-quarter revenue would drop by 19% from the prior quarter on weakness in its gaming business, sending the chip designer's shares down about 8%.

The company reported preliminary results for the second-quarter, just days after chipmaker Intel Corp, Qualcomm and Sony Group forecast weak sales on demand concerns for personal computers and phones.

,

The gaming industry, largely considered to be recession proof, is beginning weaken as consumers weigh purchases of discretionary items such as video-game consoles.

Also Read

Nvidia served USD5.5 million penalty by US SEC, here's why

Last month, Xbox-maker Microsoft reported a slump in gaming revenue while PlayStation-maker Sony trimmed its forecast.

Chipmakers have also been struggling with worsening supply-chain snarls ahead of the key holiday period due to the Russia-Ukraine conflict and COVID-19 curbs in China's manufacturing hubs in recent months.

Nvidia said its gaming unit's preliminary revenue, which includes sales of high-end graphic cards for desktops and laptops, declined 44% from the previous quarter to USD2.04 billion.

Piper Sandler analyst Harsh Kumar said the magnitude of the decline was surprising, not the warning on gaming revenue.

"Nvidia's gaming slowdown likely includes the chips they sell to the crypto market which has been weak hence the extent of the slowdown is so significant," J.P. Morgan analyst Sandeep Deshpande said in a note.

Nvidia increased the supply of cryptocurrency mining processors, which brought in USD266 million in the second quarter last year.

Also Read

Nvidia reportedly testing RTX 40-series GPUs

The company expects to report overall second-quarter revenue of about USD6.70 billion on Aug. 24.

Analysts had estimated revenue of USD8.1 billion, with contribution from gaming at USD3.12 billion, according to IBES data from Refinitiv.

Data Center revenue hit a record, but fell short of estimates due to supply disruptions, Nvidia said, adding that quarterly results will include charges of USD1.32 billion due to excess inventory and commitments in anticipation of demand.

Shares of chipmakers including peers AMD and Qualcomm also fell on Monday.

( Details and picture courtesy from Source, the content is auto-generated from RSS feed.)

Join our official telegram channel for free latest updates and follow us on Google News here.