Due to the weak gaming market in the second quarter, Nvidia issued a revenue warning.
Nvidia Corp. issued a warning on Monday that the slowdown in its gaming industry would cause its second-quarter sales to decline by 19% from the preceding quarter, which caused the chip maker's shares to fall by approximately 8%.
Only a few days after chipmakers Qualcomm, Sony Group, and Intel Corp. forecasted negative sales due to concerns about the demand for personal computers and phones, the business released preliminary results for the second quarter.
The video game sector, which was previously thought to be recession-proof, is starting to deteriorate as customers hesitate to buy discretionary items like video game consoles.
Sony cut its prediction as PlayStation maker Sony reported a decline in gaming income last month.
Due to the Russia-Ukraine war and COVID-19 limits in China's manufacturing centers, chipmakers have also been battling with severe supply-chain bottlenecks ahead of the crucial Christmas season.
Preliminary revenue for Nvidia's gaming division, which includes sales of premium graphics cards for desktops and laptops, fell by 44% to $2.04 billion from the prior quarter.
According to IBES statistics from Refinitiv, analysts predicted revenues of $8.1 billion, with $3.12 billion coming from gaming.
Nvidia stated that despite hitting a record, data center revenue fell short of expectations owing to supply disruptions, and that charges of $1.32 billion will be included in the quarter's results as a result of excess inventory and promises made in anticipation of demand.
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