Nvidia shares declined dramatically after the chip maker said a slowdown in gaming-related sales would lead to quarterly revenue coming in less than Wall Street anticipated.
The slide of as much as 9% resulted in significant losses in the broader tech sector, dragging down key US equity benchmarks. The stock fell to an intraday low of $172.42, the weakest price since July 27, before trimming the intraday decline to 8%.
The firm noted its second-quarter revenue forecast could go down to $6.7 billion from $8.1 billion previously in a statement released Monday, citing weakness in the gaming segment.
“Our gaming product sell-through projections declined significantly as the quarter progressed,” Jensen Huang, Nvidia’s founder and CEO, said in the statement. “As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory.”
Gaming sales plummeted 44% to $2.04 billion from the first quarter and slipped by 33% from the second quarter a year earlier. The firm also said it took second-quarter charges of $1.32 billion on inventory reserves.
