Nvidia reported that preliminary revenue for its gaming division fell 44 percent from the prior quarter.
Nvidia warned on Monday that its second-quarter revenue would fall 19% from the previous quarter due to deterioration in its gaming division, sending the chip designer's stock down around 8%.
The business revealed preliminary second-quarter results just days after chipmakers Intel, Qualcomm, and Sony forecasted dismal sales due to concerns about demand for personal computers and phones.
The gaming business, which was previously thought to be recession-proof, is beginning to deteriorate as customers weigh purchases of discretionary products such as video-game consoles.
Microsoft reported a drop in gaming income last month, while Sony cut its prediction for the PlayStation.
Chipmakers have also been dealing with worsening supply-chain snarls in recent months as a result of the Russia-Ukraine crisis and COVID-19 limits in China's manufacturing centers.
Nvidia reported that preliminary revenue from its gaming sector, which includes sales of high-end graphics cards for desktops and laptops, fell 44 percent from the previous quarter to $2.04 billion (roughly Rs. 16,240 crores).
The severity of the decrease, rather than the caution on gaming revenue, surprised Piper Sandler analyst Harsh Kumar.
"Nvidia's gaming slowdown presumably includes the chips they sell to the crypto market, which has been sluggish, resulting in the magnitude of the slowdown," JP Morgan analyst Sandeep Deshpande wrote in a note.
Nvidia raised its supply of cryptocurrency mining chips, which earned $266 million (about Rs. 2,120 crores) in the second quarter of last year.
On August 24, the company plans to post overall second-quarter revenue of about $6.70 billion (about Rs. 53,350 crores).
According to IBES statistics from Refinitiv, analysts predicted sales of $8.1 billion (approximately Rs. 64,500 crores), with gaming contributing $3.12 billion (about Rs. 24,840 crores).
Nvidia claimed that data center sales hit a record but fell short of expectations owing to supply disruptions and that quarterly earnings will include penalties of $1.32 billion (approximately Rs. 10,510 crores) for excess inventory and commitments made in anticipation of demand.
On Monday, shares of chipmakers such as AMD and Qualcomm plummeted.
Source: gadgets360.com
