Nvidia says video gaming market slowing; shares drop 7%
The Hindu
CEO Jensen Huang said that Nvidia's gaming business revenue will post a percentage drop in the mid-teens for the current quarter compared with the previous quarter.
Chip designer Nvidia Corp forecast its sales of video game chips would decline in the current quarter, and startled some analysts by laying out new supply-chain issues resulting from China's COVID-19 lockdowns.
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Chief Executive Jensen Huang told Reuters that Nvidia's gaming business revenue will post a percentage drop in the mid-teens for the current quarter compared with the previous quarter.
"Overall the gaming market is slowing," Huang said. Based on the softer market demand, Nvidia has chosen to reduce what it sells into the China market, he said. Nvidia is also taking a hit from Russia and sees "slower sell-through" in Europe, he said.
Nvidia shares fell 6.7% in extended trading, even though the company's first-quarter revenues and earnings topped analyst estimates. The shares are down about 40% so far this year in tandem with a wider selloff in growth stocks over concerns of aggressive interest rate increases by the U.S. Federal Reserve.
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Nvidia forecast second-quarter revenue of $8.10 billion, plus or minus 2%. Analysts on average expected $8.45 billion, according to IBES data from Refinitiv.
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