Nvidia's Q1 earnings report exceeded analysts' estimates on revenue and earnings per share.
After the market closed, NVIDIA Corporation (NVDA), the chip giant, released its first-quarter earnings report. Nvidia's graphics chips for gaming and data centers are projected to be in high demand. Earnings exceeded Wall Street projections on revenue and earnings per share. $8.29 billion in revenue vs $8.10 billion estimated. $1.36 earnings per share, compared to $1.30 estimated, $3.62 billion in gaming vs the estimated $3.53 billion and Data Center $3.75 billion vs the estimated $3.63 billion.
While some experts are concerned about how the slowdown in the technology industry may affect chip manufacturers, one analyst feels there may be a silver lining. Data center demand has been resilient, and it might be a lifeline for chip manufacturers like Nvidia attempting to shore up their bottom lines.
Nvidia, on the other hand, fell short of its sales targets for the second quarter. The company expects $8.1 billion in revenue in the current quarter, while Wall Street was anticipating $8.44 billion. Nvidia stated in a statement that an anticipated $500 million decrease is linked to Russia and the COVID lockdowns in China.
Nvidia shares dipped in the extended session Wednesday after COVID shutdowns in China and the crisis in Ukraine reduced the chip maker's expectations for the current quarter by half a billion dollars, despite the business reporting record profits.
After hours, Nvidia shares fell 7% after rising 5.1 percent to $169.75 during the regular session.
Nvidia's earnings come at a time when tech companies have been particularly battered as part of a larger market selloff. Nvidia shares are down more than 28% in the previous three months, while AMD (AMD) shares are down more than 20%.
AMD's stock has recently been struggling to recover from a five-week slump. In the midst of this collapse, the firm posted great profitability and provided strong projections. Though it has traded lower in the last two weeks, it has only lost 2%. In comparison to the S&P 500 and Nasdaq, which both fell 5.4 percent and 6.5 percent, AMD stock performed admirably. The stock is again back on the radar of traders.
The bulls are often attempting to regain control of the market. If they do, AMD stock is likely to be a popular option. AMD at $85.50, the 61.8 percent retracement from the late-2021 high to the March 2020 COVID low occurs.
That level served as support before, during, and after the company's earnings announcement on May 3. AMD stock is stuck between $85 and $100, with the sliding 10-week moving average acting as a barrier. While the stock has reclaimed this level of active resistance at times, it has not closed above it on a weekly basis since late March.
Before that, bulls would have to travel all the way back to late 2021 to locate the last time AMD closed above the 10-week moving average.
Qualcomm (QCOM) shares have also dropped 22%.Meanwhile, Intel (INTC) has managed to keep approximately in step with the S&P 500, with shares falling more than 9% compared to the index's 7% decrease.
Graphics cards are finally returning to shop shelves after months of devastating supply chain problems, which is critical for Nvidia and gamers. That's not to imply that chip scarcity is over; far from it.
Intel CEO Pat Gelsinger estimates that the scarcity will last until 2024, implying that we are still a long way from resuming pre-pandemic availability for many semiconductors.
However, Nvidia's and AMD's GPUs are becoming more affordable as bitcoin prices fall. When the price of cryptocurrency falls, so do card prices, as miners shift their focus away from buying up available supply to create coins.
In the following months, Nvidia is also likely to launch its next graphics card portfolio. The cards, dubbed the RTX 4000-series, should deliver a nice performance improvement over the company's existing RTX 3000-series line, as well as increase Nvidia's bottom line.
