NVIDIA (NVDA) reported weaker-than-expected revenue in the third quarter of fiscal 2019. Its revenue of $3.18 billion rose ~21% YoY (year-over-year) from $2.64 billion in the third quarter of fiscal 2018 and increased 2% sequentially from $3.12 billion in the second quarter of fiscal 2019.
However, its revenue was below its revenue expectation of $3.25 billion and analysts’ estimate of $3.24 billion. Meanwhile, rival Advanced Micro Devices’ (AMD) revenue rose 4.4% YoY due to computing and graphics segment revenue, and Intel’s (INTC) revenue rose 19% YoY to $19.2 billion in the third quarter.
Fall in demand from cryptocurrency miners
NVIDIA, a maker of graphics chips for gaming and AI, has been reporting double-digit revenue growth for the past 13 quarters. It earns more than 85% of its revenue from four platforms: gaming, data centers, professional visualization, and automotive.
The company enjoyed high demand for graphics chips during the crypto market boom. However, recently, the company has witnessed a significant fall in demand for GPUs (graphics processing unit) related to cryptocurrency miners. NVIDIA’s revenue from personal computer makers also fell almost 40% in the quarter due to the lower demand for GPU products, which were mainly used in cryptocurrency mining.
Sales from gaming increased 13% YoY to $1.76 billion but fell from the previous quarter and missed the consensus estimate of $1.89 billion due to a drop in cryptocurrency mining demand. Meanwhile, the company’s CEO, Jensen Huang, believes that gaming demand is likely to improve this holiday season, as the prices of mid-range gaming chips have stabilized.
For the fourth quarter of fiscal 2019, NVIDIA expects its revenue to reach $2.70 billion plus or minus 2%, down from analysts’ expectation of $2.9 billion for the quarter due to the inventory pile-up of chips with distributors and retailers amid the end of cryptocurrency mining boom. Its revenue is expected to be ~7% lower than its revenue of $2.9 billion in the fourth quarter of fiscal 2018.
NVIDIA (NVDA) failed to meet analysts’ expectations in the third quarter of fiscal 2019, which it reported on November 15 after the market bell.
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