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Shares of Nvidia are down more than 40% this year as of Tuesday’s close.
Justin Sullivan/Getty Images
After a recent spate of recent problems for
Nvidia
,
investors are wondering how soon the chipmaker’s business can recover. They’ll get an important update after the close on Wednesday when the company releases its latest numbers and outlook.
Earlier this month,
Nvidia
(ticker: NVDA) announced in advance disappointing second fiscal quarter results. At the time, the company said it expected revenue for the July quarter to be $6.7 billion, down significantly from $8.1 billion previously. He cited weaker-than-expected sales in the gaming segment and a difficult macroeconomic environment, adding that “challenging market conditions” were expected to continue in the fiscal third quarter.
Wall Street analysts have since lowered their consensus numbers for Nvidia. They now estimate the company will report revenue for the July quarter of $6.7 billion — in line with Nvidia’s latest forecast — with adjusted earnings per share of 50 cents. Analysts were expecting $6.9 billion in revenue for the current quarter.
Earlier this week, Bernstein analyst Stacy Rasgon reaffirmed his outperform rating on Nvidia stock, citing its future product lineup.
“We can see cause for optimism once we overcome the current headwinds,” he wrote.
However, some others analysts worry that demand for Nvidia’s graphics card may remain weak due to its exposure to crypto mining, increased prices for its high-end cards and the negative effects of a deteriorating global economy.
Nvidia shares are down 42% this year as of Tuesday’s close, down from a 28% drop in
iShares Semiconductor ETF
(SOXX), which tracks the performance of the ICE Semiconductor Index.
Write to Tae Kim at tae.kim@barrons.com