NVIDIA, a leading global chip manufacturer, records below expectations performance in the second quarter of this year due to a decrease in demand in the game sector. NVIDIA‘s stock price fell more than 4% in after-hours trading as its third-quarter earnings guidance also fell below market forecasts.
According to U.S. economic broadcaster CNBC on the 24th (local time), NVIDIA recorded sales of 6.7 billion dollars in the second quarter of this year, far below the market forecast of 8.1 billion dollars. Adjusted net income per share was also $0.51, less than half of the market forecast of $1.26.
The decline in sales in the NVIDIA game sector affected such poor performance. “The macroeconomic headwinds that swept the world led to a sharp slowdown in demand for game products,” said Collette Cress, chief financial officer of Nvidia. NVIDIA also said it will consult with retailers to adjust product prices. NVIDIA’s game sales, including graphics processing units (GPU), fell 33% year-on-year to $2.04 billion. NVIDIA explained that sales of graphics cards used in game PCs performance were sluggish.
NVIDIA is a representative company that has been in a pandemic boom due to increased demand for PC games during the pandemic. The increase in sales in the game sector also affected the increase in graphic card sales used for mining as cryptocurrency mining became active. However, NVIDIA said it cannot accurately quantify the aftermath of the decline in demand for graphic chips for cryptocurrency mining due to the sluggish cryptocurrency market.
On the other hand, the data center sector recorded $3.8 billion, up 61% year-on-year, performing better than expected. Sales in the vehicle sector increased 45% year-on-year, but the proportion of sales was $220 million, which is small.
NVIDIA is expected to post sales of $5.9 billion in the third quarter of this year, falling short of the market forecast of $6.95 billion. Analysts say that it is difficult to avoid a blow to sales due to slowing demand in the game sector for the time being.
