Nvidia stock takes a nosedive after disappointing earnings report

[mongeese]

What just happened? Nvidia’s stock value has plummeted by nearly 19%, the worst one-day percentage drop in over ten years. The reason: Nvidia expects fourth-quarter earnings to be only $2.7 billion, substantially less than the $3.4 billion expected by analysts. This means the company has lost nearly $25 billion in market capitalization, more than AMD’s entire market cap of $21 billion.

It’s not all bad news, however. The third-quarter earnings themselves weren’t that bad, with Nvidia earning $3.18 billion, or $1.82 per share. While that is slightly less than the $3.24 billion that Wall Street was expecting, it’s still 2% better than last quarter and 21% better than the same period last year. In response, Nvidia increased dividends by 7% to $0.16 per share.

Their earnings report, released on Thursday, claim record profits in the data center, automotive and professional visualization (Quadro) sectors. It isn’t surprising to hear that Quadro RTX is going well, as ray-tracing innovations have had a much larger impact in the professional world compared to the gaming side.

Speaking of ray tracing, investment company Goldman Sachs says that GeForce RTX’s lackluster launch is one of the things that’s contributing to Nvidia’s low expectations of fourth-quarter earnings. Even worse, however, is Nvidia’s overstocked inventory.

“Our near-term results reflect excess channel inventory post the crypto-currency boom, which will be corrected. Our market position and growth opportunities are stronger than ever. During the quarter, we launched new platforms to extend our architecture into new growth markets – RAPIDS for machine learning, RTX Server for film rendering, and the T4 Cloud GPU for hyperscale and cloud.”

Nvidia was expecting the mining boom to continue for longer, so they manufactured more graphics cards than the market ended up requiring. And once the boom was over, there was even less demand for Nvidia’s cards than before, because of the large number of cheap high-end graphics cards that swamped the second-hand market.

As we reported yesterday, one consequence of this is that mid-range Turing cards could take another to six-plus months to arrive, potentially reducing Nvidia’s revenue in the meantime.

Permalink to story.

https://www.techspot.com/news/77479-nvidia-stock-takes-nosedive-after-disappointing-earnings-report.html

 

[Xallisto]

YES! this is just what we want, thats what u get for putting out graphics cards out at twice the MRSP of the previous generation.

Next generation will hopefully be back to a reasonable price, instead of trying to play your customers for fools.

 

[DaveBG]

RTX my A##!!!

 

[emmzo]

Bad news for them, great news for us! Prices will surely drop. Betting on mining was pure stupid, I remember they had plans for a mining card altogether.

 

[EEatGDL]

Bad news for them, great news for us! Prices will surely drop.

That's not how it works, at all.

 

[nismo91]

I guess they deserved it for letting their cards sold way above MSRP for so long. I get it, bitcoin rage and so on. but do not forget those loyal geforce for gaming fans.

 

[emmzo]

That's not how it works, at all.

I was talking about overstocking.

 

[Eldritch]

Funny thing is this is happening when Nvidia is a Monopoly. Speaks volumes about how much hatred 20xx series has generated.

 

[noel24]

They obviously priced Turing too low. Dumb move.

 

[Morris Minor]

"2% better than last quarter and 21% better than the same period last year"


...

 

[EEatGDL]

I was talking about overstocking.

Oh right, but lowering only the Pascal line. Just factor in the import tariffs for next year; I still don't have a clear picture of what things will have what level of import tariff. Let's keep in mind a possibility of 25-40% price increase for PC components.

 

[ghostf1re]

This is what happens when they price gouge consumers. I'll stick with my 1080ti for a few more years. There's nothing in this reiteration of their cards that makes it a must buy for me anyway.

 

[Theinsanegamer]

I was talking about overstocking.

Oh right, but lowering only the Pascal line. Just factor in the import tariffs for next year; I still don't have a clear picture of what things will have what level of import tariff. Let's keep in mind a possibility of 25-40% price increase for PC components.

Any company that increases their MSRP by 25% over the tariffs is taking its customers for a wallet-ruining ride.

The tariffs are on the cost of materials for the manufacturers. A price increase of 5% would more then cover the costs, especially as they are simply moving manufacturing to taiwan instead. If a company increases prices 25%, just ignore their product.

And 40%? Cmon, thats just fearmongering.

 

[iamcts]

I was talking about overstocking.

Oh right, but lowering only the Pascal line. Just factor in the import tariffs for next year; I still don't have a clear picture of what things will have what level of import tariff. Let's keep in mind a possibility of 25-40% price increase for PC components.

Any company that increases their MSRP by 25% over the tariffs is taking its customers for a wallet-ruining ride.

The tariffs are on the cost of materials for the manufacturers. A price increase of 5% would more then cover the costs, especially as they are simply moving manufacturing to taiwan instead. If a company increases prices 25%, just ignore their product.

And 40%? Cmon, thats just fearmongering.

Massive companies like Nvidia exist to make a profit for their shareholders first, and care about what consumers want second. Make no mistake - the tariffs will get passed onto the consumer since it directly hits their profits.

 

[Xallisto]

This is what happens when they price gouge consumers. I'll stick with my 1080ti for a few more years. There's nothing in this reiteration of their cards that makes it a must buy for me anyway.

You wouldn't mind but these are still on the 14nm process as well. So they are basically only refined pascal chips. They must think were all fools.

Ill be sticking with my GTX 1080 as well.

 

[ET3D]

That's why I don't put much stock in stocks. They don't represent much but the stock market speculation.

 

[Dimitrios]

Just use wooden screws and save money........................ "Strategery."

 

[EEatGDL]

Any company that increases their MSRP by 25% over the tariffs is taking its customers for a wallet-ruining ride.

The tariffs are on the cost of materials for the manufacturers. A price increase of 5% would more then cover the costs, especially as they are simply moving manufacturing to taiwan instead. If a company increases prices 25%, just ignore their product.

And 40%? Cmon, thats just fearmongering.

Hey, I'm just the messenger, that's not speculation. Those are values passed along by the expenses department from where I work at, with percentages, date and hour (I'm not sure if the specifics are confidential, so I'm not disclaiming); I didn't investigate the details, still haven't.

Both will be applied, stagged, but depending of how the imported good is categorized. So it will be either 25% or 40%. Have a nice day and a "Happy New Year" ().

 

[Xclusiveitalian]

$1,000 GPU's are NOT practical to a normal person. To a miner it is cause they wind up making money off the purchase.

 

[Nobina]

$1,000 GPU's are NOT practical to a normal person. To a miner it is cause they wind up making money off the purchase.

If that was the case mining would still be in the rise.

 

[McMurdeR]

What goes around comes around

 

[Jules Mark]

Good...

Back when almost all AMD card where sold out, Huang could have gain substantial market share with his gpus, but no... He wanted to sell it at a high price, at mining card's price! Even when his card aren't that good at crypto mining.

He sees an opportunity and he got greedy. So he order a TON of GeForces to sell at exuberant price.

Well...This serve him right.