Nvidia reduces revenue in the fourth quarter by $ 500 million
Nvidia warned investors today that it expects much weaker sales, thanks to China's weakened economy and reduced demand from crypto curve miners. Nvidia says it has probably made $ 500 million less than previously expected in the last quarter – $ 2.2 billion in revenue, as opposed to $ 2.7 billion.
Nvidia predicted that it would be worse in the fourth quarter thanks to a lack of demand from cryptocurrency miners, as digital coin prices have largely made mining unprofitable for most except the largest and most efficient organizations. Earlier in 2018, Nvidia had filled up excess inventory for the cryptocurrency boom, and provided a lot of consumer demand. It is consistent with the reports that GPU rates were inflated, and players found it difficult to obtain GPUs at the height of cryptocurrency mania.
But when the boom went out, Nvidia even met a complaint action in December for allegedly misleading investors, claiming that a fall in GPU demand would not harm the company's profits. The lawsuit says Nvidia claimed to be "masters of managing our channel" and monitoring the crypto course market.
While Nvidia was expecting the losses from cryptocurrency, China's weakening economy was more of an unexpected twist. China's economy has damaged companies from Apple to Samsung, and Nvidia is just the last company to quote as a source of battle. The Chinese economy has slowed down, with the government injecting a record $ 83 billion in cash on January 1[ads1]6, hoping to fight the weak growth. Given the country's love for PC games, the slowdown has directly affected Nvidia's sales.
China has been here before, but last time it was here with the rest of the world. In the course of the global globalization in 2008, the Chinese government responded by flooding the economy with cash, which successfully increased the growth rate while creating huge debts. This time, officials do not resort to such extreme tactics, hoping that measures such as tax relief and rail projects will play a role in saving the economy. China's economic accidents are also exacerbated by the ongoing wage war with the United States.
In addition, fewer consumers than expected expected to buy higher GPUs that used Nvidia's new Turing architecture. According to Nvidia, many probably expected the GPUs to be cheaper or even newer and more advanced models to come out. "Q4 was an extraordinary, unusually turbulent and disappointing quarter," said Jviden Huang, Nvidia's founder and CEO in a statement.
Earnings call is scheduled for Valentine's Day.
