Nvidia Corp’s quarterly revenue missed its projections by more than US$1 billion, surprising investors and piling on more evidence that demand for electronic components is drying up quickly after a two-year boom.
Fiscal second-quarter revenue was about US$6.7 billion, down from its earlier projection of US$8.1 billion, the company said in a statement on Monday.
Shares of the most valuable publicly traded chipmaker fell 6.3 percent to US$177.93, their worst decline in nearly two months.
Nvidia’s report underscored a squeeze rippling across the industry: Declining consumer spending, growing inflation and a push to return to offices have reduced purchases of PCs. Intel Corp, Western Digital Corp and other companies that depend on PC sales have reported sharp declines in demand for their products.
Nvidia’s graphics chips are a staple of high-end PCs used to get the most realistic gaming experience. Most of the major gaming companies have reported falling sales or weaker outlooks this year, from PlayStation maker Sony Group Corp to Microsoft Corp, which sells the Xbox console. The add-in cards made by Nvidia also are a key part of systems used by currency miners, which make the company’s earnings vulnerable to fluctuations in those markets.
“Our gaming product sell-through projections declined significantly as the quarter progressed,” Nvidia CEO Jensen Huang (黃仁勳) said in the statement. “As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our gaming partners to adjust channel prices and inventory.”
Nvidia had already flagged strains on its performance in its second quarter, which ended on July 31. The Santa Clara, California-based company said in May that COVID-19 lockdowns in China disrupted production and transportation lines, making it harder to capitalize on demand for chips. Russia’s invasion of Ukraine also weighed on its outlook, and together the problems were expected to cut sales by about US$500 million in the fiscal second quarter, Nvidia said.
Gaming revenue in the fiscal second quarter fell 44 percent from the previous quarter and 33 percent from a year earlier to US$2.04 billion, Nvidia said.
While revenue from its data center business increased 61 percent to US$3.81 billion, it fell short of Nvidia’s projections, the company said.
Performance was “impacted by supply chain disruptions,” it said.
The quarterly results would also include about US$1.32 billion of charges, “primarily for inventory and related reserves, based on revised expectations of future demand,” Nvidia said.
“The significant charges incurred in the quarter reflect previous long-term purchase commitments we made during a time of severe component shortages and our current expectation of ongoing macroeconomic uncertainty,” chief financial officer Colette Kress said.
Nvidia is to give its full report and projections for the current period on Aug. 24.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
RSS