Nvidia earnings: One more shoe to drop for beleaguered chip maker

Nvidia Corp. has one more shoe to drop following a quarter where the chip maker cut its outlook twice.

Nvidia NVDA, +0.51%  is scheduled to report fourth-quarter earnings after the market closes on Thursday. The Santa Clara, Calif.-based chip maker recently cut its outlook for the second time in three months, citing weakness in China and slow gaming chip and data-center sales. Back in November, Nvidia cut its outlook for the fourth quarter during its previous earnings report, citing excess inventory of its midrange Pascal-architecture gaming chipsets, the older generation to the company’s recently released Turing-architecture line of chips.

“Looking forward, we are confident in our strategies and growth drivers,” Nvidia Chief Executive Jensen Huang said in a statement following the last outlook cut.

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Now, it is time for Huang and Nvidia to look forward on the record, with a 2019 forecast that will prove their fourth-quarter issues were temporary, or the unfortunate opposite. Oversupply and inventory issues along with trade war concerns with China have battered the outlooks of many chip makers even as the industry in 2018 topped annual global sales of one trillion chips for the first time.

The largest chip makers, including Intel Corp. INTC, -0.79% Taiwan Semiconductor Manufacturing Co. TSM, -0.87% and Texas Instruments Inc. TXN, +0.66%  , have predicted a cautious start to 2019, while Qualcomm Inc.’s QCOM, -0.51%  forecast outlook range bookended Wall Street estimates and Advanced Micro Devices Inc. AMD, +1.68%  proved to be an outlier, offering the most bullish 2019 outlook so far. Analysts on average expect Nvidia to collect $11.41 billion in revenue in the just-begun fiscal year, according to FactSet.

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Nvidia investors expect

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