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Chip maker Nvidia (NVDA, $172.22) reported second-quarter earnings that missed Wall Street expectations for revenue and earnings per share. Nvidia said that the miss was because of lower sales of its gaming products, which are primarily graphics cards for PCs which that are facing “challenging market conditions.”
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The chipmaker said it expected $5.9 billion in sales in its fiscal third quarter, versus Refinitiv consensus estimates of $6.95 billion. Nvidia’s gaming department revenue was down 33% year-over-year to $2.04 billion, which was a sharper decline than the company anticipated. Revenue was as expected at $6.7 billion and EPS stood at $0.51, adjusted, versus $1.26 expected.
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The company said its data center business grew 61% in the quarter. The data center segment is Nvidia's main growth engine, as companies increasingly turn to machine learning and artificial intelligence.
Why it matters
Nvidia’s success in the past two years has been largely attributed to the quality of its latest generation of graphics cards, which were in hot demand for PC gaming during the pandemic. Nvidia stock is down over 42% so far since the beginning of the year. It had been a pandemic darling, rising heavily as work-from-home prompted purchases of graphics cards and server chips.
