Nvidia cuts revenue projections by $500m

[Shreyas1]

Looks like Nvidia pulled an Apple and blamed China 

[Hellion]

Big surprise that over priced cards with gimmick features that only act to ruin performance on any measurable metric aren't carrying nvidia to the promised land.

 

There's only so much juice you can squeeze from the majority fruit of the market before it's no longer justifiable for the primary consumer.

[mr moose]

3 minutes ago, Carclis said:

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.

Whilst that makes sense, it still makes their claims of everything going "Largely" as expected to be a little less than honest.  That's like saying I am a largely close to being a millionaire,  I just need to win the lottery, sell my house and work another job for a bit.

[Carclis]

1 minute ago, mr moose said:

Whilst that makes sense, it still makes their claims of everything going "Largely" as expected to be a little less than honest.  That's like saying I am a largely close to being a millionaire,  I just need to win the lottery, sell my house and work another job for a bit.

Well I believe their last investor meetings were also less than honest. Remember when Jensen said that they were "masters of inventory management" and that cryptocurrency mining dying off would not affect their ability to meet targets?

[mr moose]

Just now, Carclis said:

Well I believe their last investor meetings were also less than honest. Remember when Jensen said that they were "masters of inventory management" and that cryptocurrency mining dying off would not affect their ability to meet targets?

Being wrong on a forecast doesn't make him dishonest. saying the inventory is under control  except for X,Y and Z in the face of previous claims of it being D and C is a bit more of a problem. 

[79wjd]

15 minutes ago, Shreyas1 said:

Looks like Nvidia pulled an Apple and blamed China 

If by pulled an Apple, you mean accurately represented reality, then yes. The Chinese phone market is down 15% as a result of their weakened economy.

[Taf the Ghost]

Functionally, Nvidia is selling Turing cards for the same as Pascal cards. Yes, it's a new design, but the "standard" performance per price category hasn't changed. For as much as Jensen was attacking AMD over the 1060 being the best selling dGPU, they haven't actually replaced the 1060 yet. They've only rolled out the 1070 & above replacements. Those are a small portion of the dGPU market. To the consumer, Nvidia hasn't actually released anything new.

[Carclis]

1 hour ago, mr moose said:

Being wrong on a forecast doesn't make him dishonest. saying the inventory is under control  except for X,Y and Z in the face of previous claims of it being D and C is a bit more of a problem. 

He claimed that cryptocurrency was basically dead in the July earnings call and that was the reason for poor gaming market performance since the mining craze had driven up GPU prices. Then in the following earnings call in November he claimed that gaming market performance was still down because of the "crypto hangover" which had resulted in prices still remaining high, but he also remarked that demand for Turing products was "fantastic". Now we're hearing that just a little bit out from their next earnings call they're lowering projections citing that there is no problem with their inventory and it's depleting in line with their predictions, but gaming product demand and primarily Turing products are experiencing demand that is below expectations, even after prices had come down.

What that says to me is that Nvidia has failed to read the market in a significant number of areas; something I find difficult to believe given how long they have been in the industry, or they lied in one or multiple of their prior statements.

[Carclis]

On 1/29/2019 at 3:23 PM, mr moose said:

Being wrong on a forecast doesn't make him dishonest. saying the inventory is under control  except for X,Y and Z in the face of previous claims of it being D and C is a bit more of a problem. 

Speaking of which. I guess I might have been onto something. These guys are suggesting that Nvidia has far more inventory than he has led investors to believe.
https://seekingalpha.com/article/4237475-nvidia-strong-market-disguising-downside-potential?dr=1

[mr moose]

14 hours ago, Carclis said:

Speaking of which. I guess I might have been onto something. These guys are suggesting that Nvidia has far more inventory than he has led investors to believe.
https://seekingalpha.com/article/4237475-nvidia-strong-market-disguising-downside-potential?dr=1

That article just repeats the same thing the others have said, It also doesn't say anything new about inventory. 

 

It seems from that article that Nvidia is just bouncing around after stock correction from being so far in front over the last year or two.

 

I think people are trying to read way too much into this.   It's just the natural ebb and flow of stock prices,  when a company has huge sales figures and no competition it's price goes up, when sales dry up and competition is on the horizon stocks go down.   You can bet your arse that it's a little worse than any CEO makes out, because it is their job to talk up their success and downplay issues.

[Delicieuxz]

Nvidia's crypto problem may be bigger than it admits, according to an analyst who crunched the numbers

 

Analyst says Nvidia lied about its cryptocurrency earnings to avoid stock crash

 

"Nvidia's crypto problem is bigger than it admits, an RBC analyst says after crunching the numbers."

 

Quote

• Nvidia generated $1.95 billion in total revenue related to crypto/blockchain rather than its reported $602 million, according to RBC analyst Mitch Steves.

• By his calculation, total crypto revenue from April 2017 to July 2018 should be around $2.75 billion. Nvidia accounted for around 75% and AMD captured around the rest.

• Steves came to his conclusion by poring over the company's latest earnings report.

 

If so, this would give huge fodder to the lawsuit Nvidia's investors have brought against the company for its alleged misrepresentation to them of the company's future prospects:

 

 

[Carclis]

5 hours ago, mr moose said:

That article just repeats the same thing the others have said, It also doesn't say anything new about inventory. 

 

It seems from that article that Nvidia is just bouncing around after stock correction from being so far in front over the last year or two.

 

I think people are trying to read way too much into this.   It's just the natural ebb and flow of stock prices,  when a company has huge sales figures and no competition it's price goes up, when sales dry up and competition is on the horizon stocks go down.   You can bet your arse that it's a little worse than any CEO makes out, because it is their job to talk up their success and downplay issues.

Two quarters ago at an earnings call Jensen said he had approximately two quarters worth of inventory and in their target adjustment that this news post is based on they claimed that the inventory in the channel was depleting as expected. Now the news article I posted suggests that there is two and potentially even more quarters of inventory sitting in the channel still and I'm genuinely unsure how that would be possible if both of his statements are to be true. Jensen has shown a lot of reluctance towards answering inventory related questions and tends to stutter a lot when asked about it. I'm just saying that his communication hasn't been close to transparent when it comes to discussing inventory and that I think he's intentionally done that to mislead shareholders who would likely be very concerned if they saw the real inventory numbers. If inventory is still a concern come May then we'll know for sure.

[-CLASSIFIED-]

jokes on amd and nvidia , both are underwhelming and trash companys. IMO 

[mr moose]

42 minutes ago, Carclis said:

Two quarters ago at an earnings call Jensen said he had approximately two quarters worth of inventory and in their target adjustment that this news post is based on they claimed that the inventory in the channel was depleting as expected. Now the news article I posted suggests that there is two and potentially even more quarters of inventory sitting in the channel still and I'm genuinely unsure how that would be possible if both of his statements are to be true. Jensen has shown a lot of reluctance towards answering inventory related questions and tends to stutter a lot when asked about it. I'm just saying that his communication hasn't been close to transparent when it comes to discussing inventory and that I think he's intentionally done that to mislead shareholders who would likely be very concerned if they saw the real inventory numbers. If inventory is still a concern come May then we'll know for sure.

The article you linked doesn't mention quarters worth of inventory.  In July nvidia expected zero income from crypto, they have not accounted for crypto in any of their forecasts since then,  stock left in channel could be anything for all we know, but this is the only mention that comes close to inventory from that article:

 

Quote

Considering the logistics of shipping and channel movements, NVDA likely had good visibility for at least another 15-30 days. Hence its guidance was done by looking at around 30-45 days of sales for the quarter.

 

And they posted a chart that looks like everything is following the same trend it did for the last 5 years.

 

 

Seriously the micro analysis in this thread is getting ridiculous,  as, I said right back at the start, Huang is likely lying about the effects of crypto, inventory is probably high, but it doesn't look like it is screaming out of control, it's like it did three times earlier according to that chart anyway.

[Carclis]

3 hours ago, mr moose said:

The article you linked doesn't mention quarters worth of inventory.  In July nvidia expected zero income from crypto, they have not accounted for crypto in any of their forecasts since then,  stock left in channel could be anything for all we know, but this is the only mention that comes close to inventory from that article:

Here is the Quote:
 

Quote

If it walks like a duck, quacks like a duck...the goose is definitely cooked

While longs are hoping that their troubles may be behind them, we would like to take them back to one calculation that we had done in an earlier article. The calculation in our opinion was the key reason to be cautious on NVDA after its last quarter's results.

We had pointed out that NVDA's inventories were bloating to a very high level of days of sales, while the company fought the battle to maintain gross margins.

With sales now of $2.20 Billion and a run rate of close to $1.70 Billion in our opinion, those inventories don't look worrisome; they look catastrophic. At a 60% gross margin rate, NVDA may be hoarding over two quarters of inventories on hand.

and:

Quote

NVDA has 2-3 tough quarters as inventories clear, gross margins normalize, and revenue growth resumes.

 

[leadeater]

25 minutes ago, Carclis said:

Here is the Quote:
 

and:

 

They are lucky AMD/Radeon isn't coming out with something big any time soon or that inventory value would be at a high risk of being devalued, by a lot.

[Guest]

13 minutes ago, leadeater said:

They are lucky AMD/Radeon isn't coming out with something big any time soon or that inventory value would be at a high risk of being devalued, by a lot.

Good to know, must be a good time to invest in Nvidia stocks

[mr moose]

35 minutes ago, Carclis said:

Here is the Quote:
 

and:

 

That's not in the article you linked.

 

This is the article you linked
https://seekingalpha.com/article/4237475-nvidia-strong-market-disguising-downside-potential?dr=1

 

 

Addressing the actual figures,  yep, they look high.  But I'll bet  the left leg of my office chair that in 4 quarters time no one will even remember this and stocks will still be bouncing around the same as always.

 

 

[Carclis]

20 minutes ago, mr moose said:

That's not in the article you linked.

 

This is the article you linked
https://seekingalpha.com/article/4237475-nvidia-strong-market-disguising-downside-potential?dr=1

 

 

Addressing the actual figures,  yep, they look high.  But I'll bet  the left leg of my office chair that in 4 quarters time no one will even remember this and stocks will still be bouncing around the same as always.

 

 

It most certainly is. It might be showing you a limited version because you do not have an account?

 

I guess we'll see how this affects them in the long run but with Navi on the horizon it sounds like an impossible feat for them to achieve the same levels of revenue because margins will be limited by the necessity to compete and sales will be reduced due to the supposedly huge inventory they still need to get rid of.

[mr moose]

3 minutes ago, Carclis said:

It most certainly is. It might be showing you a limited version because you do not have an account?

 

I guess we'll see how this affects them in the long run but with Navi on the horizon it sounds like an impossible feat for them to achieve the same levels of revenue because margins will be limited by the necessity to compete and sales will be reduced due to the supposedly huge inventory they still need to get rid of.

No, I don't have an account,  That would have been beneficial information at the start of this conversation.

[straight_stewie]

On 1/28/2019 at 3:58 PM, violentnumeric said:

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

Purposefully lying on SEC reports is a serious crime, but it's hardly anything that could possibly lead to an extermination of the competition.

AMD is actually in a really nice spot here: They have two companies, Intel and Nvidia, which happen to also be their largest/only competitors, who really don't want AMD to die for fear of anti-trust suits.

Intel and Nvidia may try to bully AMD around, and in the past have seen varying degrees of success at that, but they would never hurt AMD to the point that they weren't a market competitor, because that would stop the gravy train dead on the tracks.