NVIDIA Corp (NVDA)

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Nvidia forecasts sharp drop in third-quarter sales as games drag
By: Reuters | August 24, 2022

• Chip designer Nvidia Corp predicted third-quarter revenue below market expectations on Wednesday, delivering a one-two punch as weak gaming demand led to a 19% sequential decline in second-quarter sales.

(Reuters) -Graphics chip designer Nvidia Corp on Wednesday forecast a sharp drop in revenue in the current quarter on the back of a weak gaming industry.

The company said it expected third quarter revenue of $5.90 billion, down 17% on year, but said the declines would be partially offset by growth in the data center and automotive business.

“We are navigating our supply chain transitions in a challenging macro environment and we will get through this,” Nvidia’s chief executive Jensen Huang said in an earnings statement.

Nvidia’s shares dipped 2.8% in after hours trading, with second quarter revenue of $6.70 billion significantly lower than the $8.10 billion Nvidia forecast in May.

Its gaming division posted revenue of $2.04 billion, down 33% year on year. Data center revenue held up with $3.81 billion, up 61% year on year.

The gaming industry has been showing signs of weakness as consumers pull back from discretionary purchases such as video-gaming gear amid decades-high inflation.

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

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