Nvidia predicts that its sales figures will decline over the reminiscent of the current quarter. The company points fingers at the COVID-19 lockdowns and restrictions imposed in several Chinese regions. The company has published a list of new supply-chain issues that will limit stock and sales in a report that has startled analysts.
The company is predicting its gaming business revenue to drop to the mid-10s over the current quarter, as Nvidia Chief Executive Officer (CEO), Jensen Huang, told Reuters. This drop will mostly be in contrast to the profit the company has managed to scoop up in other parts of this year.
In his keynote, Jensen Huang said, “Overall the gaming market is slowing.” He pointed out that this part of the year is infested with lesser demand overall. Thus, the company is limiting its availability in several markets around the world. The ongoing war between Ukraine and Russia also has softened demand and sales of Nvidia’s gaming-related products in Europe.
Nvidia topped the revenue estimated by analysts in the first quarter of this year. Reports from their first-quarter sales came in on May 1. The company’s revenue rose by 46%, thereby pushing the company’s record to $8.29 billion. The company was valued at $1.36 per share. Estimates predicted a much lower $1.29 per share.
However, in this quarter, their shares have fallen by almost 6.7%. This brings the share value down by almost 40% from what the company started the year with. Most of this fall is due to the wider selloff after aggressive interest rates were issued by the U.S. Federal Reserve.
Inflation can be also pointed out as another reason why the company predicts to turn over a loss. With the rising rates across the country, companies have started to price their products higher than they used to do in the past. Thus, the value proposition falls apart as consumers weigh purchases of items like graphics cards and laptops, two of the major sectors Nvidia is currently involved in.