Rick Wilking/Reuters
Jensen Huang, CEO of Nvidia, shows the Drive Pegasus robotaxi AI computer at his keynote address at CES
- Nvidia shares plunged Monday after the chipmaker lowered its guidance for the fourth quarter of fiscal year 2019.
- CEO Jensen Huang said declining macroeconomic conditions, particularly in China, impacted demand for Nvidia's gaming graphics processing units.
- Watch Nvidia trade live.
Nvidia lowered its guidance for the fourth-quarter of fiscal year 2019 Monday, citing significantly weaker economic conditions in China and disappointing sales of its gaming and datacenter platforms. The announcement sent shares plunging by 15%.
"Q4 was an extraordinary, unusually turbulent, and disappointing quarter," Jensen Huang, founder and CEO, said in a filing with the Securities and Exchange Commission.
"As we worked through Q4, the global economy decelerated sharply, particularly in China, affecting consumer demand for NVIDIA gaming GPUs. Also, with initial shipments of new high-end RTX GPUs selling above MSRP, some customers may have delayed their purchase while waiting for lower price points and further demonstrations of RTX technology in actual games."
The chipmaker cut its revenue guidance to $2.2 billion, plus or minus 2%. Previously, it expected revenue of $2.7 billion, plus or minus 2%.
Companies, analysts, and strategists across sectors have warned investors for months that economic growth is slowing in China, the world's second-largest economy, and a trade war with the US hasn't helped. Apple cited the concern earlier this month when it lowered its own revenue guidnace.
Nvidia shares slid Friday after Jefferies removed the name from its "Franchise Picks" list. The firm, which maintained its "buy" rating, said it expected "cloud players to digest Data Center capacity over the next several quarters."
Shareholders will receive more information about how the company fared in the fourth quarter when Nvidia reports on February 14.
This story is developing. Please check back for updates.
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