Nvidia Plunges To One-Year Low After Slashing Q2 Outlook; Blames Russia, China

Nvidia announced record revenue for the first quarter ended May 1, 2022, of $8.29 billion, up 46% from a year ago and up 8% from the previous quarter.

However, under the hood it was not all rosy:

  • Datacenter revenue $3.75 billion, +83% y/y, beats estimate $3.62 billion

  • Gaming revenue $3.62 billion, +31% y/y, beats estimate $3.53 billion

  • Professional Visualization revenue $622 million, +67% y/y, misses estimate $647.9 million

“We delivered record results in Data Center and Gaming against the backdrop of a challenging macro environment,” said Jensen Huang, founder and CEO of NVIDIA.

“The effectiveness of deep learning to automate intelligence is driving companies across industries to adopt NVIDIA for AI computing. Data Center has become our largest platform, even as Gaming achieved a record quarter.

“We are gearing up for the largest wave of new products in our history with new GPU, CPU, DPU and robotics processors ramping in the second half. Our new chips and systems will greatly advance AI, graphics, Omniverse, self-driving cars and robotics, as well as the many industries these technologies impact,” he said.

However, Nvidia missed on its bottom line:

  • Q1 earnings were up 26.09% YoY at $1.16, but that was a big miss relative to expectations of $1.26.

And worse still, what traders are really focused on is the cut to guidance for Q2:

Revenue is expected to be $8.10 billion, plus or minus 2%, they reported. This considerably less than the $8.44 billion expectation.

This includes an estimated reduction of approximately $500 million relating to Russia and the COVID lockdowns in China.

Of course, in an offering to desperate investors, Nvidia announced that on May 23, 2022, the board of directors increased and extended the company’s share repurchase program to repurchase additional common stock up to a total of $15 billion through December 2023.

The reaction was swift with NVDA down 9% after-hours, breaking down to its lowest level since May 2021...

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Nasdaq futures are tanking on this move, erasing a lot of the day's gains.

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