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Nvidia cuts revenue projections by $500m

Belgarathian

Nvidia has cut revenue projections for quarter 4 of this financial year by $500m stating that the reason for the recast of projected revenue is slower sales in the Chinese gaming market and excess mid-range inventory left over from the crypto boom slowing the sales of Turing GPUs.

 

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In Gaming, NVIDIA’s previous fourth-quarter guidance had embedded a sequential decline due to excess mid-range channel inventory following the crypto-currency boom.

 

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However, deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs.  In addition, sales of certain high-end GPUs using NVIDIA’s new Turing™ architecture were lower than expected.

 

So to put it in Jensen's own words, "underwhelming... the performance is lousy and there's nothing new".

 

Nvidia should have expected this outcome when consumer pricing for the new Turing architecture took such a large leap that supply and demand relationship is elastic (as it's a luxury good), and the performance benefit in most cases isn't significantly better to justify the price increase unless ray tracing gives you wet dreams. I mean that's economics 101.

 

After the announcement Nvidia shares predictably dropped ~13.5% in value closing out the 28th Jan 19 with a market cap of $84b down 44% since Oct 2nd, 2018.

 

image.png.2d82256a95795d52452f4286319a7e76.png

 

https://nvidianews.nvidia.com/news/nvidia-updates-financial-guidance-for-fourth-quarter-of-fiscal-year-2019

 

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3 minutes ago, Belgarathian said:

"underwhelming... the performance is lousy and there's nothing new".

What comes around.

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Good, NVIDIA is a horrible company that is trying to exterminate competition through highly illegal practices. I'm happy to see this.

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Time to buy Nvidia stock. 

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2 minutes ago, Belgarathian said:

>So to put it in Jensen's own words, "underwhelming... the performance is lousy and there's nothing new".

>Nvidia shares predictably dropped ~13.5%

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10 minutes ago, TVwazhere said:

Image result for lisa su

Something tells me that the Doctor herself isn't happy about the coin crash either which is likely the main reason for the adjustment here.

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For those unfamiliar with stocks, you can't look at one in isolation. The whole market is moving up and down too. AMD are down 8% also. nvidia's 14% might be higher, but the market is moving downwards at the moment.

amdstock.png.3f6e8bcbadba49cf0bdf1ac7914e13df.png

 

Edit: now I actually bothered to look at the wider market, it isn't changing as much as these two are... intel hardly budged, nor are some of the major indexes I've looked at.

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27 minutes ago, Belgarathian said:

sales of certain high-end GPUs using NVIDIA’s new Turing™ architecture were lower than expected.

because they are expensive as hell with no real budget option

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24 minutes ago, ARikozuM said:

Time to buy Nvidia stock. 

not at all, stock is still widely overvalued and will fall more in the months to come. This drop was not unjustified, and therefore there won't be a bounceback tomorrow, at least not by more than a couple percentage points, if even

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6 minutes ago, porina said:

For those unfamiliar with stocks, you can't look at one in isolation. The whole market is moving up and down too. AMD are down 8% also. nvidia's 14% might be higher, but the market is moving downwards at the moment.

amdstock.png.3f6e8bcbadba49cf0bdf1ac7914e13df.png

 

Edit: now I actually bothered to look at the wider market, it isn't changing as much as these two are... intel hardly budged, nor are some of the major indexes I've looked at.

amd dropped because of nvidia's revenue downgrade, investors are expecting the same to happen to amd

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15 minutes ago, porina said:

For those unfamiliar with stocks, you can't look at one in isolation. The whole market is moving up and down too. AMD are down 8% also. nvidia's 14% might be higher, but the market is moving downwards at the moment.

amdstock.png.3f6e8bcbadba49cf0bdf1ac7914e13df.png

 

Edit: now I actually bothered to look at the wider market, it isn't changing as much as these two are... intel hardly budged, nor are some of the major indexes I've looked at.

Very true... It's also a good idea to look at 12 month and 5 year trends.

 

image.png.0f6cb22623f4a8199db356a1bd9beb9e.png

image.png.3a16f333a4bfcc5d448aeb7f999cdb4b.png

 

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13 minutes ago, COTG said:

amd dropped because of nvidia's revenue downgrade, investors are expecting the same to happen to amd

Likely, but AMD should have some resistance as they're part GPU, part CPU, unlike nvidia. 

2 minutes ago, Belgarathian said:

Very true... It's also a good idea to look at 12 month and 5 year trends.

It seems human to do so, but I've never been good at telling the future by looking at the past. If I do, I'd still look relative to competitors or applicable indexes to get a feel for the direction.

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1 minute ago, porina said:

Likely, but AMD should have some resistance as they're part GPU, part CPU, unlike nvidia. 

It seems human to do so, but I've never been good at telling the future by looking at the past. If I do, I'd still look relative to competitors or applicable indexes to get a feel for the direction.

The best indicator IMO is a well thought through and communicated growth strategy and a stellar leadership team with a history of success.

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I am shocked that video cards without a compelling performance bump in a given price tier, or those in an outlandishly priced new tier, have not sold well. Shocked, I tell you.

 

Cue the "but muh DLSS fineWine"

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Also people need to remember that its mid-range cards left in channel stock, they don't personally have warehouses full of unsold cards, they are still sitting on the shelves in retail stores.  

 

 

Quote

The reduction in that inventory and its impact on the business have proceeded largely inline with management’s expectations. However, deteriorating macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs.

In other words the decline in Chinese sales is the cause for the excess stock, they aren't two separate issues and there is no mention of mining in the report.

Grammar and spelling is not indicative of intelligence/knowledge.  Not having the same opinion does not always mean lack of understanding.  

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33 minutes ago, mr moose said:

In other words the decline in Chinese sales is the cause for the excess stock, they aren't two separate issues and there is no mention of mining in the report.

It's literally the first sentence of the opening paragraph and quoted directly from the release in my post.

 

Quote

In Gaming, NVIDIA’s previous fourth-quarter guidance had embedded a sequential decline due to excess mid-range channel inventory following the crypto-currency boom.

 

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nVidia have been way too overvalued and therefore unjustified because crypto frenzy on the GTX1000 series.

As I been saying many times: when those scumbags are so used to the increased profits by increasing the prices of the GPU's in the crypto craze, they simply can't and won't accept the fact that the crypto bubble will collapse one day. And the normal gamers simply have no choice (more like they won't wait) than paying up for the high prices. And the RTX prices won't help either, they are simply way too overpriced and not worth at all. DLSS is for now nothing but a buzz word and hype.

 

nVidia, you're underwhelming too.

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28 minutes ago, Belgarathian said:

It's literally the first sentence of the opening paragraph and quoted directly from the release in my post.

 

 

I stand corrected.   I did not read your sentence I went straight to the article.

 

However that sentence doesn't exactly correlate with the following claim of being "within expectations" except for economics in China.  So which is issue? sales in china or mining?  If their stocks in the channel are within expectations then mining is not the reason for the adjustment because they claim that was within expectations. They said so not only just now  but also early that such stock would be under control again by February this year. 

Grammar and spelling is not indicative of intelligence/knowledge.  Not having the same opinion does not always mean lack of understanding.  

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9 minutes ago, mr moose said:

I stand corrected.   I did not read your sentence I went straight to the article.

 

However that sentence doesn't exactly correlate with the following claim of being "within expectations" except for economics in China.  So which is issue? sales in china or mining?  If their stocks in the channel are within expectations then mining is not the reason for the adjustment because they claim that was within expectations. They said so not only just now  but also early that such stock would be under control again by February this year.  

It's a combination of the following having weaker performance than predicted, rather than just one:

 

  • Chinese gaming card sales
  • Data center
  • Turing card sales
  • Excess inventory
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4 hours ago, ARikozuM said:

Time to buy Nvidia stock. 

>me when it dipped from $180 to $172

 

4 hours ago, porina said:

The whole market is moving up and down too

only tech stocks, and its because of Nvidia's guidance update. If people aren't buying many Nvidia's products, they probably aren't buying other tech products either.

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Combined with the middling reception of the RTX 2000 series, if AMD could just muster some better competition, Nvidia might push 7nm products out the door a bit faster instead of coasting along like they have been with Pascal.

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4 hours ago, Belgarathian said:

unless ray tracing gives you wet dreams

Still not enough.  You have seen the prices, right?  For that much you're looking anywhere from half a dozen BJs to the full Wienstein treatment in the flesh.

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1 hour ago, Belgarathian said:

It's a combination of the following having weaker performance than predicted, rather than just one:

 

  • Chinese gaming card sales
  • Data center
  • Turing card sales
  • Excess inventory

No, I mean, they specifically mention crypto, however they also addressed that in their last report and in this report they say the inventory is as expected except for the Chinese market.  Both of those things cannot be true at the same time.  Either the inventory is as expected ignoring the effects of the Chinese market or their inventory is not going as expected.

 

Grammar and spelling is not indicative of intelligence/knowledge.  Not having the same opinion does not always mean lack of understanding.  

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44 minutes ago, mr moose said:

No, I mean, they specifically mention crypto, however they also addressed that in their last report and in this report they say the inventory is as expected except for the Chinese market.  Both of those things cannot be true at the same time.  Either the inventory is as expected ignoring the effects of the Chinese market or their inventory is not going as expected.

 

They mentioned mid-range specifically as being the one that is in oversupply, but clearing out as expected (they didn't say Chinese inventory as far as I can tell). They also mentioned that Chinese market is performing lower than expected due to poor economic conditions. So it sounds like cryptocurrency is only mentioned to state that it's responsible for the mid-range oversupply but not the current poor performance compared to projections. Given that the Turing is cited as performing poorly across the board it sounds like they're suggesting that everybody who would have purchased that ended up purchasing Pascal cards, which would have resulted in the inventory levels clearing as expected.

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