Nvidia shares tumble after pessimistic Q1 revenue forecast

Graphics card company Nvidia has spooked investors with the revenue forecast it made for Q2 2022 this week. Shares of the chipmaker fell after it announced that revenue for Q2 would be short of analysts’ expectations.

The disclosure was made in the company’s first-quarter earnings report. Specifically, the forecast is that revenue for the current quarter would be about $8.1 billion, while analysts expect $8.54 billion. The statement read:

“Our outlook for the second quarter of fiscal 2023 is as follows: Revenue is expected to be $8.10 billion, plus or minus 2%. This includes an estimated reduction of approximately $500 million relating to Russia and the COVID lockdowns in China.”

CNBC noted that the shares of the company dipped around 10% in after-hour trading following the forecast. However, the earnings report showed that Nvidia clinched several record-breaking figures during Q1.

The company’s revenue for Q2 is up 46% year-over-year, with a record-breaking quarterly revenue of $8.29 billion. Nvidia also recorded a record-breaking quarterly revenue for its gaming chips and data center businesses.

Nvidia’s gaming chips can be used in digital currency block reward mining. Nvidia, however, did not reveal how much revenue from its gaming business is linked to block reward mining.

Meanwhile, Nvidia reports that its digital currency-specific products (CMP) drove a 52% decline in other revenue. This is because their revenue during the quarter was “nominal.”

Nvidia puts SEC debacle behind it as it plans for 2022

Earlier this month, Nvidia’s relationship to block reward mining was the subject of regulatory scrutiny. The firm was slammed with a $5.5 million settlement by the SEC. The SEC alleged that Nvidia failed to disclose how much of a boost the use of its gaming chip for block reward mining gave to its revenue.

The settlement also includes an agreement to a cease-and-desist order. The allegations date back to 2018. At the time, Nvidia’s gaming chip began to shoot up in price after users started to use them for block reward mining as digital currencies were becoming more popular.

However, the settlement is now a thing of the past for Nvidia as it has outlined more plans for its business this year. Nvidia’s plans spans across its gaming, cloud computing, professional visualization, block reward mining, and data center businesses.

It also plans to complete a $15 billion share buyback by the end of next year. Speculation is also that the sales of its flagship block reward mining machine, the CMP 170HX, will continue to be in high demand.

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