Nvidia Shares Dip on China Sales Outlook Concerns

Nvidia Shares Dip on China Sales Outlook Concerns

VoM News Desk | November 23, 2023 | 02:51 PM IST | Breaking News | Follow on Google News

Nvidia Shares Dip on China Sales Outlook Concerns

Nvidia Shares Dip on China Sales Outlook Concerns

Nvidia’s shares saw a notable decline of more than 2% on Wednesday, closing at $487.16, following the company’s subdued sales forecast for China. This drop comes despite the chip manufacturer reporting revenues surpassing Wall Street expectations.

Challenges in the Chinese Market

The primary concern for Nvidia stems from its forecast of a significant decrease in fourth-quarter sales in China, which has been a crucial market for the company. This expected downturn is largely attributed to new US export control regulations, which severely limit what Nvidia can sell in China. Sales from the affected chips constituted nearly a quarter of Nvidia’s datacenter sales in recent quarters.

Financial Performance and Forecasts

Despite the challenges in China, Nvidia projected an adjusted gross margin of 75.5% for the fourth quarter, surpassing analyst expectations of 72.64%. The company anticipates current-quarter revenue to be around $20 billion, subject to a 2% variation. Nvidia’s third-quarter adjusted revenue tripled to $18.12 billion, exceeding the estimated $16.18 billion. On an adjusted basis, earnings per share were $4.02, higher than the expected $3.37.

Impact of Export Controls

The new US export controls are expected to significantly impact Nvidia’s business in China, with Chief Financial Officer Colette Kress expressing uncertainty regarding the long-term effects. These controls are part of broader geopolitical tensions and have introduced a level of unpredictability in Nvidia’s operations in the Chinese market.

Kinerja Saham dan Outlook

Despite the recent dip, Nvidia shares have experienced substantial growth, with an increase of over 240% this year and a rise of more than 13% in the past month. The company’s strong financial performance and technological advancements, particularly in AI, continue to drive investor interest despite the current challenges.

VoM News Desk

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