![]() ![]() Still, revenue seems likely to be light - $5.9 billion, plus or minus 2%, according to management. Nvidia seems to see this as a temporary phenomenon, predicting that gross margins will shoot right back up in the third quarter to 62.4%, close to where they were in the first quarter. Gross profit margins on Nvidia's sales simply shriveled in the second quarter - down 2,130 basis points to just 43.5% - as operating costs rose. Rather, what seems to be ailing Nvidia - and what could ail AMD and Applied Materials next - is a pretty pronounced decline in demand for semiconductor chips, and in the prices chipmakers can command for them. But we've been dealing with constrained supply chains for a couple of years now, and up until this week, they hadn't slowed Nvidia down much. While Nvidia closed the day up yesterday, at one point on Thursday the stock was down as much as 5% in response to the announcement that fiscal second-quarter 2023 sales grew only 3% year over year, missing analyst expectations, and that GAAP earnings per share tumbled 72% year over year to just $0.26.Ĭommenting on the results Wednesday evening, CEO Jensen Huang largely blamed "supply chain transitions in a challenging macro environment" for the disappointing results. ![]() The Fed chair's comments today seem to be to blame for much of the wide-ranging sell-off in the market, but Nvidia itself bears some of the responsibility here for fanning pessimism in the semiconductor space. Following in Nvidia's footsteps are shares of its archrival chipmaker Advanced Micro Devices (NASDAQ: AMD) down 5.2%, and Applied Materials (NASDAQ: AMAT), a manufacturer of equipment for making semiconductor chips, down 4.9%. ET on Friday, shares of Nvidia (NASDAQ: NVDA) reversed course sharply from their surprise rise post-earnings Thursday, and are now down 8.1%. ![]() And it seems that was enough to spook growth stock investors on Friday, with semiconductor stocks featuring heavily among the decliners.Īt 2:20 p.m. Federal Reserve Chairman Jerome Powell warned today that he plans to keep monetary policy tight "for some time," even if it inflicts "some pain" on American businesses and consumers. ![]()
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