Nvidia stock drops as China COVID shutdowns weaken outlook

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In an extended session on Wednesday following the COVID shutdown in China, Nvidia Corp. U.S. shares fell and the war in Ukraine shaved half a billion dollars from the chipmaker’s outlook for the current quarter, while the company reported record results.

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nvidia nvda,
+5.08%
Shares were down 7% after hours, closing at $169.75 after rising 5.1% in the regular session.

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For the fiscal second, or current, quarter, Nvidia forecast revenue of $7.94 billion to $8.26 billion, while analysts surveyed by FactSet forecast average revenue of $8.4 billion. “This includes an estimated reduction of approximately $500 million related to the COVID lockdowns in Russia and China,” Nvidia said in a statement.

This Cisco Systems Inc. Similar to CSCO,
+0.53%,
Which reported its earnings last week and, like Nvidia, has an April-ending quarter. Cisco noted that it was broadened after Chinese authorities shut down Shanghai starting March 27, and threw a monkey wrench into the ability to receive components. As a result, Cisco issued a poor outlook and shares saw their worst day in more than a decade.

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Nvidia reported first-quarter net income of $1.62 billion, or 64 cents per share, compared to $1.91 billion, or 76 cents per share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.36 per share, compared to 91 cents per share in the year-ago period. All figures are adjusted for last year’s 4-for-1 stock split.

Revenue rose to a record $8.29 billion, up from $5.66 billion in the year-ago quarter.

Analysts had forecast $1.30 per share on revenue of $8.12 billion, based on Nvidia’s forecast of $7.94 billion to $8.26 billion.

The end of one-chip wonders – why valuations of Nvidia, Intel and AMD have experienced turmoil

“We delivered record results in data center and gaming against the backdrop of a challenging macro environment,” Nvidia Chief Executive Jensen Huang said in a statement. “We are gearing up for the biggest wave of new products in our history, with new GPUs, CPUs, DPUs and robotics processors ramping up in the second half. Our new chips and systems will advance the many industries these technologies affect, along with AI, graphics, omniverse, self-driving cars and robotics. ,

On the data-center side, sales rose 83% to $3.75 billion, up from $2.05 billion in the year-ago period, compared with analysts’ expectations of $3.6 billion.

Gaming sales rose 31% to a record $3.62 billion from $2.76 billion, while analysts polled by FactSet expected Nvidia gaming sales of $3.46 billion.

Why are semiconductor stocks ‘nearly non-investable’ despite record earnings amid global shortages?

Nvidia results from major chip makers such as Advanced Micro Devices Inc. amd,
+1.63%,
Intel Corp. INTC,
+1.27%
and Qualcomm Inc. qcom,
+2.10%
While Broadcom Limited AVGO,
+1.42%
To report on 2nd June.

Over the past 12 months, Nvidia shares are up 8%, while at the same time down nearly 50% from their record closing high of $333.76 on Nov. 29. In comparison, the PHLX Semiconductor Index SOX,
+1.98%
S&P 500 Index SPX, down 8% in last 12 months
+0.95%
is down 5%, and the Nasdaq Composite Index comp,
+1.51%
16% off.

Credit: www.marketwatch.com /

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