Nvidia reports Q3 earnings as chip demand remains weak

Graphics chip giant Nvidia (NVDA) will report its third-quarter results on Wednesday after the closing bell as the industry continues to grapple with a slowdown in chip demand, rising interest rates and foreign exchange headwinds.

Here’s what Wall Street expects the company to see in the quarter, as compiled by Bloomberg, compared to how it performed in the same period last year.

  • Revenue: $5.8 billion expected versus $7.1 billion last year

  • Custom WPA: $0.70 expected versus $1.17 last year

  • Gaming Income: $1.3 billion expected versus $3.22 billion last year

  • Data Center Revenue: $3.7 billion versus $2.9 billion last year

Chip stocks have been hammered this year as consumer and business demand for electronics has ebbed due to the explosive growth the industry saw during the pandemic. Consumers don’t need as many computers after buying them up during shutdowns, and companies already have enough machines for their remote and hybrid employees.

Nvidia CEO Jensen Huang makes a point during his keynote address at CES in Las Vegas, Nevada, U.S., January 7, 2018. REUTERS/Rick Wilking

Nvidia CEO Jensen Huang makes a point during his keynote address at CES in Las Vegas, Nevada, U.S., January 7, 2018. REUTERS/Rick Wilking

Nvidia cut back on chip production in the second quarter, with CEO Jensen Huang telling investors the company is working to realign inventory to match customer demand for chips.

Nvidia’s graphics chips were so sought after during the pandemic that they sold for hundreds of dollars more than their retail price. But as consumers return to their pre-pandemic lives, demand for potato chips has declined and prices have returned to normal levels.

Nvidia is also working to ensure it can still sell its high-end products in China. Nvidia began offering its new A800 chip in the country in the third quarter as a replacement for the A100 chip, which the US government said was too powerful to ship to China. The government fears that China will use the technology for military applications.

Ahead of earnings on Wednesday, Nvidia announced a partnership with Microsoft (MSFT) to build one of the most powerful AI supercomputers in the world using Nvidia’s chips and Microsoft’s Azure infrastructure. The computer is designed to help train large-scale AI systems.

Sign up for Yahoo Finance’s Tech Newsletter

More from Dan

Do you have a tip? Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @DanielHowley.

Click here for the latest technology news, reviews and helpful articles on technology and gadgets

Read the latest financial and business news from Yahoo Finance

Leave a Reply

Your email address will not be published. Required fields are marked *