In a gloomy week for retailers, department store operator Nordstrom Inc (JWN.N) fell 12.6 percent after quarterly same-store sales missed estimates and the company reported charges from a credit card problem. It will be interesting to see how things shake out in the current quarter, with the GeForce RTX line carrying a pricing premium (compared to Pascal) as Nvidia pushes the benefits of real-time ray tracing and other capabilities inherent in the underling Turing architecture powering the new cards. Shares plunged almost 17 percent in late trading.
Chief Executive Jensen Huang said prices for Nvidia's gaming cards had risen with the cryptocurrency frenzy, driving some buyers away.
But that process was slower than Nvidia expected, Huang said, saying he expects inventories to be at normal levels by the end of the current quarter.
"Crypto Hangover" Lasts "Longer Than Expected " The crypto hangover lasted longer than we expected. "We thought we had done a better job managing the cryptocurrency dynamics", he later added.
Several chip stocks fell in sympathy.
Nvidia's provision for inventories reportedly increased to $70 million in Q3 2018, and the company stated that the same provision had increased over three times during the first nine months of its financial year (FY) to $124 million.
Chan said demand was faltering for Nvidia's chips in data centres. Starting from January 1st, 2019, tariffs on many goods imported from China are expected to increase by up to 25 percent. AMD's shares sank 7 percent after Nvidia posted results after the market closed Thursday.
"Nvidia's inventory build-up is suggesting that the escalating tariffs have started to pinch producers", said Haris Anwar, analyst at Investing.com.
Revenue from Nvidia's closely watched data center chips business rose 58 percent to $792 million, but missed analysts' estimate of $820.4 million, according to FactSet.
The provisions for inventory lowered Nvidia's gross margins by 1.8 percentage points in the quarter to 60.4 percent, though margins were still up from 59.5 percent a year earlier.
Excluding items, Nvidia earned $1.84 per share, Total revenue rose 20.7 percent to $3.18 billion.
Wall Street was looking for earnings of $1.71 per share on revenue of $3.24 billion.