nvidia earnings

Nvidia (NYSE: NVDA) reported its earnings for the fiscal third quarter of 2023 yesterday after the markets closed yesterday. While its earnings were mixed, it impressed markets with the performance of its data center business.

Nvidia reported revenues of $5.93 billion in the quarter, which was 17% lower YoY. The revenues were nonetheless ahead of the $5.77 billion that analysts were expecting. During the fiscal second-quarter earnings call, it guided for revenues of $5.9 billion for the third quarter, which was $1 billion lower than what markets were expecting.

Looking at the breakup of fiscal third quarter revenues, the Data Center segment reported revenues of $3.83 billion which was 31% higher than the corresponding quarter last year. However, the Gaming segment’s revenues tumbled 51% to a mere $1.57 billion. The segment’s revenues fell 23% as compared to the sequential quarter as well.

Notably, in the fiscal second quarter also, Nvidia’s gaming revenues fell by a third. There has been a slump in the segment which is hurting Nvidia as well as other companies with exposure to online gaming.

Nvidia’s Professional Visualization segment posted revenues of $200 million. While revenues rose 65% YoY, they fell 60% as compared to the sequential quarter. Its Automotive segment posted revenues of $251 million in the quarter, which was 86% higher than the corresponding period last year.

Nvidia sees the Automotive segment as a key growth driver. The automotive industry’s chip demand has spiked over the last few years as electric and autonomous cars use more chips than traditional cars.

Nvidia Misses Earnings Estimates in the Fiscal Third Quarter

Nvidia reported an adjusted EPS of $0.58 in the quarter which was below the $0.69 that analysts were expecting. Its gross margins fell to 53.6% in the quarter. Jensen Huang, founder and CEO of Nvidia said, “We are quickly adapting to the macro environment, correcting inventory levels and paving the way for new products.”

Notably, in the previous earnings call, Nvidia talked about the inventory overhang and said that it is taking steps to clear the inventory. The crash in cryptocurrencies has been another headwind for Nvidia.

Nvidia said, “We believe the recent transition in verifying Ethereum cryptocurrency transactions from proof-of-work to proof-of-stake has reduced the utility of GPUs for cryptocurrency mining.”

Nvidia said that it expects to post revenues of $6 billion in the fiscal fourth quarter at the midpoint. It expects adjusted gross margins of between 65.5%-66.5%.

Along with the slowing economy, the COVID-19 restrictions in China are hurting Nvidia’s sales. The US has also restricted the sales of some high-end chips to China. However, the company said that the impact would be minimal as it would be offset by sales of alternate products.

China Chip Restrictions

Previously, Nvidia said that the China chip sales restrictions would dent its revenues by $400 million. Several Wall Street analysts had also lowered NVDA’s target price after the chip sales restrictions.

For the long term, Nvidia is a play on multiple exciting themes like autonomous driving and metaverse. We have a list of companies that are a play on metaverse.

Meanwhile, NVDA stock has sagged this year amid the fall in chip stocks. It was among the best-performing stocks of 2020 and 2021 as demand for its products surged. Many analysts see the fall in Nvidia stock as a good buying opportunity for the long term. We have a guide on how to buy stocks through a credit card.

Related stock news and analysis

Dash 2 Trade - New Gate.io Listing

Our Rating

Dash 2 Trade
  • Also Listed on Bitmart, Changelly, LBank, Uniswap
  • Collaborative Trading Platform Token
  • Featured in Bitcoinist, Cointelegraph
  • Solid Proof Audited, CoinSniper KYC Verified
  • Trading Community of 70,000+ Members
Dash 2 Trade