Nvidia Revenue Drops 17%, But Its Data Center Growth Is Still Strong
Nvidia has announced its 3rd quarter results, which show its sales are much higher than Wall Street's expectation. However, it was the EPS of Nvidia which came to light! Due to these results, the stock of Nvidia gained 1% during the extended trading session.
If we look at the results of Nvidia, it was expected to be $0.69 but turned out to be $0.58. However, its revenue of Nvidia was $5.93 billion, which was higher than the market's expectation of $5.77 billion.
For the 4th quarter, Nvidia is expecting its sales to be around $6 billion only. However, the experts were expecting a number close to $6.09 billion.
Gross Margin And Revenue Are Both Down
During the 3rd quarter, the gross margin of Nvidia was down by 11.6% to around 53.6%. According to the company, it was due to the slow demand in China for the company's data center chips. Another troubling news was the revenue of Nvidia which was down by 17% on a yearly basis.
And for the current quarter (4th quarter), the company is expecting its gross margin to be in the 63.2% - 66% range.
When it comes to the tech industry in general, one of the companies which are most watched by investors is Nvidia. By looking at the financial results of Nvidia, investors can gauge the health of the entire tech sector.
PC Gaming Market Is Slowing Down
The pandemic boom had boosted the PC gaming market, but it seems that effect is now fading away. During 2020 - 2021, the graphic cards from Nvidia were difficult to find due to the high demand. But now, the same graphic cards are available in the retail market with discounts.
However, Nvidia has made an announcement recently that its new graphic cards will carry a higher price than the older models.
The gaming division of Nvidia reported sales of $1.57 billion which were down by 51% on a yearly basis. However, the company claims that the retailers already have a lot of inventory. This forced the company to sell less as the current supply was surpassing the demand.