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Nvidia does less business with games: shares fall

Nvidia does less business with games: shares fall

Of Nvidia chip company he does not expect a quick recovery after the failed sales expectations. For the current quarter, Nvidia forecasts sales of about $5.9 billion (around €5.9 billion) on Wednesday. that would end billion dollars less than in the same quarter of the previous year – and also significantly less than expected by analysts.

Revenue for the fiscal second quarter ending in July was in line with preliminary figures released, up 3 percent to $6.7 billion. Nvidia itself originally had more than 8 billion dollars expected. The trigger for the development was a game business that was even weaker than expected. Nvidia’s graphics cards are not only used in PCs, whose sales are currently weak, but also for the production of CRYPTOCURRENCIESwhich has become less lucrative as prices have fallen.

Jamming of graphics cards in warehouses

Gaming revenue of $2.04 billion fell for the third year over year, as announced. In the data center business, on the other hand, sales amounted to $3.81 billion, an increase of 61 percent. Among other things, Nvidia’s technology is widely used for applications based on artificial intelligence, and the US group also relies heavily on the car business as a supplier of computers to Mercedes, among others.

The end result was the quarterly profit $656 million from a good $2.37 billion a year earlier. Company boss Jensen Huang said in a conference call with analysts, among other things, that Nvidia was shipping significantly fewer graphics cards to sales channels so that the Jams in warehouses the distributor will be dismantled. This could continue for “a few quarters”. Nvidia posted a $1.22 billion inventory draw amid reduced demand expectations.

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fallen stock

At the same time, Nvidia must honor commitments to suppliers it has long-term agreements with amid supply shortages in the early days of the coronavirus pandemic.

Investors lowered the shares about 4.6 percent in after-hours trading. The course increased considerably last year to $330 in November. After that, he started a bad streak and in the end he was good with 160 dollars at the May 2021 level.