Nvidia Share: Chipmaker misses Q3 profit target

Maker of graphics chips Nvidia (NVDA) missed Wall Street’s profit target late Wednesday on higher-than-expected sales in the fiscal third quarter. It also roughly matched estimates with its sales guidance for the current period. Shares of Nvidia rose in extensive trading.




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The Santa Clara, California-based company earned an adjusted 58 cents per share on revenue of $5.93 billion in the quarter ended Oct. 30. Analysts polled by FactSet had forecast Nvidia earnings of 71 cents per share on revenue of $5.78 billion. Year-over-year, Nvidia’s revenues were down 50%, while revenues were down 17%. It was the company’s second straight quarter of declining earnings.

Weak demand for gaming chips weighed on Nvidia’s September quarter results.

For the current quarter, Nvidia expects revenue of $6 billion, plus or minus 2%. Wall Street modeled revenue of $6.07 billion for the fiscal fourth quarter. Revenue for the same period last year was $7.64 billion.

Nvidia Stock has a subpar composite rating

In after-hours trading in the stock market today, Nvidia shares climbed 1.8% to 162.03. During Wednesday’s regular session, Nvidia shares fell 4.5% to close at 159.10.

“We are adapting quickly to the macro environment, correcting inventory levels and paving the way for new products,” CEO Jensen Huang said in a press release.

In the third quarter, Nvidia data center sales increased 31% year over year to $3.83 billion. However, game sales fell 51% to $1.57 billion.

Nvidia stock ranks number 15 out of 34 stocks in IBD’s fabless semiconductor industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 46 out of 99.

Earlier on Wednesday, Nvidia announced a multi-year partnership with Microsoft (MSFT) to build one of the most powerful AI supercomputers in the world. The cloud-based supercomputer will house tens of thousands of Nvidia graphics processing units, or GPUs, along with Nvidia’s networking equipment and artificial intelligence software. It will run on Microsoft’s Azure cloud infrastructure.

Follow Patrick Seitz on Twitter @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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