I own shares of $NVDA , and may buy some more on declines. I'm trying to get a handle on when gaming revenues may bottom. Even though, Q2 earnings were anticipated and matched revised estimates, the Q3 revenue guidance of $5.7Bn was way below consensus estimates of $6.7Bn.
A few takeaways from the earnings call.
They guided to 65% gross margins for Q3 – Given the weakness in ASP's for gamin chips – is it achievable?
I was trying to estimate Q3 gaming revenues.
From the earnings call
Analyst “I guess, based on the guidance commentary, where I’ve come up thinking about would be like a 30-plus percent sequential decline in gaming”
CFO – “And we do expect, yes, gaming to decrease, not in the dollar amount that it decreased between Q1 and Q2.Our Data Center yes, we do expect it to grow. It may grow about what we just saw between Q1 and Q2.”
Based on management's revenue estimate of $5.7Bn and the commentary above, I'm getting these estimates for Q3.
All Numbers in Millions.
Data Center – $3,871 – sequential growth of 3%
Auto -$221 – sequential growth of 5%
Viz – $500, the same as Q2
OEM – $130, the same as Q2
GAMING – If $5,700 is the total then that leaves only – $1,000 for gaming, which is a sequential drop of 50%.
Does that make sense?
Alternatively, a sequential drop of 30% would put gaming at $1,428, then the revenue total goes to $6,100
Sandbagging? Difficult to tell.
The markets are fairly sanguine about $NVDA's prospects , the stock is up 2% to $177 after falling to $164 in extended trading, I didn't see downward revisions.
I'm keen on picking up some if it declines another 5% from here, but that is looking difficult.
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