Back to top

Image: Bigstock

NVIDIA Crashes 16% After Q3 Miss, Lowered Guidance

Read MoreHide Full Article

Shares of A.I. chip giant NVIDIA (NVDA - Free Report) have fallen in a 16.5% crater in late trading today following the company's Q3 earnings report that missed expectations on both top and bottom lines, as well as disappointing guidance looking ahead. Earnings of $1.84 per share missed the Zacks consensus by 3.66% while revenues underperformed by 1.79% in the quarter to $3.18 billion. Shares are now trading at 52-week lows.

After two years of stellar growth in its Gaming and Data Center segments, we're seeing a leveling off for NVIDIA, and expectations have suddenly come down dramatically. The company itself cites "excess channel inventory" related to the "post-crypto currency boom, which will be corrected." Thus, revenue guidance for its fiscal Q4 in January has been ratcheted way down to $2.7 billion from the $3.4 billion analysts had been expecting.

No doubt analysts will be busy re-working their models, with lower price targets and estimates going forward. NVIDIA, which had been a Zacks Rank #3 (Hold)-rated company ahead of the earnings release, will likely be taken down a peg or two in the near-term. Not only that, but investors who have remained tech-heavy may see these NVIDIA results lead the sector down in Friday's pre-market activity as well.

NVIDIA still possesses a state-of-the-art platform with its Turing products, which will keep the company viable over the longer term, but hits to its high-growth segments -- and now with companies like AMD (AMD - Free Report) announcing they intend to challenge NVIDIA's preeminence in the Data Center space -- are taking this recently high-flying Tech favorite down. For more on NVDA's earnings, click here.
 

Wall Street’s Next Amazon

Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.

Click for details >>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Advanced Micro Devices, Inc. (AMD) - free report >>

NVIDIA Corporation (NVDA) - free report >>

Published in