NVIDIA Revises Financial Outlook for 2019 by $500 million, Immediately Hit Back by the Stock Market

[Raevenlord]

NVIDIA's stock value has been falling precipitously in the last several months. We reported in December that the company lost some 48.8% in value between October and December, moving from an all-time peak of $289.36 on October 1st, to just under $149 on December 14th. At the time, excess inventories were the cause, alongside a less than glamorous reception to their new RTX series of graphics cards. Now? NVIDIA cites "deteriorating macroeconomic conditions, particularly in China" as harming demand for their gaming GPUs. But this now comes alongside a its datacenter business also falling short of expectations - that's two of NVIDIA's most lucrative markets being put towards the red, or at least, with lower than expected income revenues.

This led the company to revise its financial outlook for the year, lowering revenue estimates by $500 million, down to $2.2 billion from its initial $2.7 billion forecast. Gross margins have been lowered by some 7%, which means lowered earnings for investors. Since the December plunge, NVIDIA's stock had recovered up to around $160 per share, but has now dived 14.52%, down to $136.90 - even lower than before. The company has seen its market valuation shrink by more than 50% inside of four months - while the company is still well in the green side of the limbo, so to speak, these certainly don't serve to improve the company's spirit.



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[erocker]

I guess their "raise the price of everything" strategy has backfired.






Good.

 

[Nokiron]

I guess their "raise the price of everything" strategy has backfired.






Good.

it has been unrealistic for quite a while, they were valued higher than IBM which makes no sense. So it's a big part market correction.

 

[trparky]

it has been unrealistic for quite a while, they were valued higher than IBM which makes no sense. So it's a big part market correction.

I've often wondered why nVidia was valued more than IBM. Granted IBM of today isn't exactly the IBM of yesteryear but really... nVidia is like a one-trick pony compared to the likes of IBM.

 

[Paganstomp]

TSMC's Fab 14 B has been affected with a chemical contamination.

 

[Vya Domus]

I have stipulated for a long time that their stock is ballooned beyond anything that's reasonable. AI hardware solutions are going custom, autonomous driving didn't quite blow up as everyone thought and even their gaming products are a hard sell. Dark times await Nvidia and their long term strategies.

 

[INSTG8R]

I guess Jensen was banking a few more of those whole pallets of cards we heard about. Because we know that’s where they ended up.
https://edition.cnn.com/2019/01/28/tech/nvidia-earnings-warning-china/index.html

 

[GloryToYou]

I would be tempted to invest in nvidia at this lower price point, if not for the fact that intel is getting into the discrete GPU market in 2020. Yeah, RTX cards are a poor value, but one poor product series hopefully wouldn't sink them. I do think that they still have a tech lead over AMD. When pitted against intel's might though, things are way less certain.

 

[Fluffmeister]

I would be tempted to invest in nvidia at this lower price point, if not for the fact that intel is getting into the discrete GPU market in 2020. Yeah, RTX cards are a poor value, but one poor product series hopefully wouldn't sink them. I do think that they still have a tech lead over AMD. When pitted against intel's might though, things are way less certain.

It's a fair point, although with Raja and the "poor Volta" marketing team at Intel it's hard to say what will happen. I guess the bonus for them is they now have a decent R&D budget to play with.

 

[birdie]

I have stipulated for a long time that their stock is ballooned beyond anything that's reasonable. AI hardware solutions are going custom, autonomous driving didn't quite blow up as everyone thought and even their gaming products are a hard sell. Dark times await Nvidia and their long term strategies.

Dark times only for stupid investors seeking for a quick buck - NVIDIA is doing fine. Also, as their customer I couldn't care less what their stock price is. Also, lower stock price means cheaper stock buyback.

In short, only NVIDIA haters will cheer on this news. The others don't need to apply.

 

[notb]

it has been unrealistic for quite a while, they were valued higher than IBM which makes no sense. So it's a big part market correction.

How is it even remotely important whether it's valued higher or lower than IBM?
Nvidia was valued in line with their earnings forecast. They corrected the forecast and stock went down.
This is how stock markets are supposed to work.

I've often wondered why nVidia was valued more than IBM. Granted IBM of today isn't exactly the IBM of yesteryear but really... nVidia is like a one-trick pony compared to the likes of IBM.

Do you actually know what IBM is selling these days?
And I wouldn't call Nvidia a "one trick pony" for sure.

 

[erocker]

I would be tempted to invest in nvidia at this lower price point, if not for the fact that intel is getting into the discrete GPU market in 2020. Yeah, RTX cards are a poor value, but one poor product series hopefully wouldn't sink them. I do think that they still have a tech lead over AMD. When pitted against intel's might though, things are way less certain.

Too soon! It's got more to tank yet.

 

[Deleted member 50521]

Glad the thread was cleaned up a bit. It was filthy when I opened it first.

 

[Steevo]

As custom silicon for AI becomes more common they will loose that market, with Intel making GPU's soon (maybe) and ARM cores with essentially AMD graphics they need to diversify, and companies aren't buying into their walled garden BS anymore.

They are a graphics company that got too big for their britches, now their ass is showing.

 

[bug]

See? This is how you correct for inflated prices. Not by flooding the forums with "omg, they upped the prices again" posts on anything with Nvidia in the title.

 

[Deleted member 177333]

I guess their "raise the price of everything" strategy has backfired.

Good.

+1

I'm surprised they haven't started to adjust pricing on Turing, yet.

 

[15th Warlock]

Gotta admit their strategy to price everything out of the reach of most gamers is finally catching up to them, they've held the performance crown too long, and if competition from AMD (or lack thereof) is not gonna make them adjust their marketing policies, poor sales definitely will.

This might sound hypocritical coming from an Nvidia owner, but thruth is, I've been waiting for an adjustment in their stock for quite some time now.

Nvidia is forgetting about the costumers who put the company in the place it is now. Hardware enthusiasts who love our craft, the comments of their CEO almost seem detached from reality sometimes.

 

[B-Real]

Everyone gets what it deserves.

 

[Prima.Vera]

nGreedia, please release the 30xx series with a 2000$ for the RTX 3080 card. A stock value of less than 50$ is what those greedy arses deserve!

 

[mtcn77]

Glad the thread was cleaned up a bit. It was filthy when I opened it first.

You wouldn't believe the things coming out of the pretentious locals, one even said, and this is the long-timer, that it could drop to the level when the bubble first started($30). Gotta give the guy a medal for hastily picking up his act.

 

[moproblems99]

It's a fair point, although with Raja and the "poor Volta" marketing team at Intel it's hard to say what will happen. I guess the bonus for them is they now have a decent R&D budget to play with.

My sentiments exactly. I think Raja was sent there to derail Intel's strategy. I have yet to actually figure out what he accomplished.

 

[Fatalfury]

As long as there is monopoly, and as long as Nvidia is the only and leading manufactures of GPU on the planet..
i dont think they care...Sooner or later stocks will increase.

Since the world solely relies on them for GPU technology.(majority of them)

 

[Xzibit]

In gaming

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

Not selling like Hotcakes ?



For datacenters

In Datacenter, revenue also came in short of expectations. A number of deals in the company’s forecast did not close in the last month of the quarter as customers shifted to a more cautious approach

Where they go? Don't they know, "The more you buy, the more you save!!!"

 

[eidairaman1]

As custom silicon for AI becomes more common they will loose that market, with Intel making GPU's soon (maybe) and ARM cores with essentially AMD graphics they need to diversify, and companies aren't buying into their walled garden BS anymore.

They are a graphics company that got too big for their britches, now their ass is showing.

Lose*

 

[bug]

^^^ Is that a comparison between Aug 22 (2018?) Nvidia and Jan 28 (2019?) AMD? Why?