Nvidia informed that its second quarter revenue will be $6.70 billion versus previous outlook of $8.10 billion due to weaker Gaming revenue.
Nvidia’s gaming unit sells high-end graphic cards for desktops and laptops.
“Nvidia’s gaming slowdown likely includes the chips they sell to the crypto market which has been weak hence the extent of the slowdown is so significant,” JP Morgan analyst Sandeep Deshpande said in a note.
Nvidia second quarter revenue is expected to be $6.70 billion, down 19 percent sequentially and up 3 percent from the prior year, primarily reflecting weaker than forecasted Gaming revenue.
Gaming revenue was $2.04 billion, down 44 percent sequentially and down 33 percent from the prior year. Data Center revenue was $3.81 billion, up 1 percent sequentially and up 61 percent from the prior year, says Nvidia.
| Revenue by Market Platform ($ in billions) |
Q2 FY23 Preliminary Results |
Q/Q | Y/Y |
| Gaming | $2.04 | — 44% | — 33% |
| Data Center | 3.81 | + 1% | + 61% |
| Professional Visualization | 0.50 | — 20% | — 4% |
| Automotive | 0.22 | + 59% | + 45% |
| OEM and Other | 0.13 | — 12% | — 66% |
| Total | $6.70 | — 19% | + 3% |
The drop from the May revenue outlook of $8.10 billion was due to lower sell-in of Gaming products reflecting a reduction in channel partner sales likely due to macroeconomic headwinds.
Nvidia has already implemented pricing programs with channel partners to reflect challenging market conditions, in addition to reducing sell-in.
Data Center revenue was impacted by supply chain disruptions.
Nvidia said second quarter results will include $1.32 billion of charges, primarily for inventory and related reserves, based on revised expectations of future demand.
“Our gaming product sell-through projections declined significantly as the quarter progressed,” said Jensen Huang, founder and CEO of NVIDIA. “We took actions with our Gaming partners to adjust channel prices and inventory.”
Intel, Qualcomm and Sony Group forecast weak sales on demand concerns for personal computers and phones, Reuters news report said.
Last month, Xbox-maker Microsoft reported a slump in gaming revenue while PlayStation-maker Sony trimmed its revenue forecast.
