In the last two years, a confluence of events over-stimulated demand for Nvidia’s (NVDA) graphics cards.
Due to the pandemic, stay-at-home measures compelled people to buy a gaming PC.
The Bitcoin and Ethereum gold rush also fueled demand for Nvidia’s GPU for crypto mining between
2020 and 2021.
The GPU giant, which is growing its data center business and metaverse central computing solution, lost
~ 10% on August 26, 2022. NVDA stock fell in sympathy with the sell-off after posting weak results.
In the last quarter, Nvidia earned only 51 cents a share. Of the $6.7 billion in quarterly revenue, the data
center contributed $3.81 billion. However, gaming-related revenue fell by 33% Y/Y to $2.04 billion.
In the upcoming quarter, Nvidia’s revenue of $5.9 billion will not get anywhere close to the $6.92 billion
consensus. CEO Jensen Huang said PC and channel partners will cut inventory. The industry’s supply is
above demand. In addition, the glut in 30xx RTX GPUs will hurt Nvidia’s 4000 series launch.
Nvidia will need to cut prices to stimulate demand. When it releases a more affordable, better-
performing RTX 4090 and 4090 Ti, high-end gamers will buy it.
Avoid NVDA stock. The company’s growth is decelerating.
