- Shares predicted to fall 3% when Wall Street reopens
- Q2 gaming revenues fall 44% on previous quarter
- Chip designer hoping for gaming lift from new architecture launch
That PC sales tanked in the second quarter to 31 July will come as no surprise to watchers of the microchip space, and it has put Nvidia (NVDA:NASDAQ) under the gun.
The Santa Clara firm's second quarter results were a mixed bag as its client PC businesses suffered declines, but its automotive and data centre businesses thrived.
Chief executive Jensen Huang confirmed what had been suspected for months, that it built too many gaming GPUs (graphics processing units) and is now being forced to sell them for less money.
‘We will get through this [inventory correction] over the next few months and go into next year with our new architecture,’ said Huang.
Nvidia will launch its next-generation Ada Lovelace architecture next month, which could give the gaming business a much-needed lift.
Gaming revenue dropped to $2.04 billion in the second quarter, down from $3.62 billion in the first quarter and $3.06 billion in the same period a year ago.
It should be noted Nvidia’s gaming revenue last quarter was still significantly higher compared with $1.65 billion in the same quarter of 2021, indicating the chip designer benefited greatly from increased demand for discrete GPUs for gaming PCs, increased prices of standalone graphics cards and the crypto mining craze.
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In contrast, Nvidia’s data centre and automotive hardware shipments were up significantly compared to the same quarter a year ago.
They will be up again in the current quarter now that the company’s Hopper H100 compute GPUs are in total production and ready to ship.
Nvidia’s stock, which has lost 40% since March, looks set to open down again when Wall Street reopens later today, with the pre-market indicating a 3% slide to $166.5.
Nvidia projects its third quarter earnings to be $5.90 billion, representing a sequential decline of 12% and an annual decline of 17%.
