NVIDIA Stock Tanks 15% as the Company Cuts Q4 2019 Financial Guidance

cageymaru

cageymaru

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NVIDIA has updated its Q4 2019 financial guidance where it lowered its Q4 2019 revenue from $2.7 billion to $2.2 billion. This is due to slowdowns in both the Gaming and Datacenter sectors. NVIDIA admits that higher prices for high-end Turing GPUs has negatively affected sales as "macroeconomic conditions, particularly in China, impacted consumer demand for NVIDIA gaming GPUs." Also a dearth of software to showcase Turing RTX features such as DLSS, real-time ray tracing, and its AI capabilities has greatly affected sales. NVIDIA was unable to close on a number of Datacenter business deals due to its customers taking a more cautious approach.

NVIDIA acknowledges that this update is an estimate and does not include all of the necessary information for an understanding of NVIDIA's financial condition at this time. NVIDIA expects its GAAP and non-GAAP gross margin to be impacted by approximately $120 million in charges for excess DRAM and other components associated with the updated revenue guidance and current market conditions. NVIDIA will conduct a conference call with analysts and investors to discuss its fourth quarter and fiscal year 2019 financial results and financial prospects on Feb. 14, 2019, at 2:30 p.m. Pacific time (5:30 p.m. Eastern time). NVIDIA faces a lawsuit for allegedly making false and misleading statements about the cryptocurrency market to investors.

"Q4 was an extraordinary, unusually turbulent, and disappointing quarter," said Jensen Huang, founder and CEO of NVIDIA. "Looking forward, we are confident in our strategies and growth drivers. "The foundation of our business is strong and more evident than ever - the accelerated computing model NVIDIA pioneered is the best path forward to serve the world's insatiable computing needs. The markets we are creating - gaming, design, HPC, AI and autonomous vehicles - are important, growing and will be very large. We have excellent strategic positions in all of them," he said.
 
This is a nasty picture.

upload_2019-1-28_10-48-45.png
 
I was thinking the same thing...good time to buy haha. I doubt nVidia and AMD will be down forever as there are currently only two players in the business. Possibly three if Intel ever gets it's gear together.
 
Nvidia stock and many companies who were overvalued due to the cryptocurrency boom have merely seen a correction to realistic prices. They certainly have not helped themselves by doubling TOTL card prices for their remaining non crypto core customer base...Gamers. And after all this... RMAs and defects for said top dog cards... Oh poetic justice, you are a harsh mistress. I'm going to sit this correction out and wait for Nvidia egos to deflate. My 1080Ti works fine. I never really got into Space Invaders ;-) Come on RTX 3080Ti !!!
 
Donald Bell said:
AMD's stock took a dip at the same time as NV's Q4 guidance. Good time to buy.
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My money is on AMD - I think they will offer a lower cost GPU to compete in the low/mid range GPU market. Not too mention, they will likely see continued use in Xbox, PS, and Apple systems. I don't think AMD is going to have the best high-end GPU, but it will be at a lower price point than Nvidia (and could result in more sales).
AMD has has new Ryzen chips on the way that should continue to compete very well against Intel (desktop and server).
Everything said, a global slow down is not going to be good for either company. I've started an initial investment with AMD a few weeks ago around $20. I'm going to pick up more on pullbacks. I'm looking at a few years out potentially before selling.
 
steakman1971 said:
My money is on AMD - I think they will offer a lower cost GPU to compete in the low/mid range GPU market. Not too mention, they will likely see continued use in Xbox, PS, and Apple systems. I don't think AMD is going to have the best high-end GPU, but it will be at a lower price point than Nvidia (and could result in more sales).
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How many times have we heard this now? If AMD can deliver a product that competes with its Nvidia equivalent, they will sell it for the same price (it near as damn it) because that's what the market will support and they need to make as much money as they can, just like Nvidia. If that then leads to a price war then great for us, but AMD aren't going to lead with heavily undercutting Nvidia from the outset.
 
This result should NOT have been a surprise to anyone. If Apple can't sell $1000 smartphones in China, what chance does Nvidia or AMD have of selling $1000 video cards? Probably a lot larger market for phones then video cards.
 
Bawjaws said:
How many times have we heard this now? If AMD can deliver a product that competes with its Nvidia equivalent, they will sell it for the same price (it near as damn it) because that's what the market will support and they need to make as much money as they can, just like Nvidia. If that then leads to a price war then great for us, but AMD aren't going to lead with heavily undercutting Nvidia from the outset.
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You are correct - AMD is going to sell it a little cheaper, but not that much cheaper. No doubt we've seen/heard it all before. However, with Ryzen as another AMD product, I think it gives them more potential than Nvidia. I'm waiting on pullbacks of the stock before doing anything else.
 
I don't think any stock has been priced 'realistically' since the 1980s, but..
Nvidia is a one-trick pony.. one trick in what will soon be a crowded pony show.
In 1 or 2 years, unless they have some miracle technology, the only thing they will lead on will be gaming, and if their high prices are any indication, ALL they will have is a meaningless performance crown... in low volume products.
Right now Nvidia is stuck in a cycle of inefficiency, the 20x series are huge dies, probably with bad yields, yes they are high performance, but its brute force approach of old gains.
AMD is suffering the same fate, made even worse due to HBM, which seems will never go down in price.
AMD however is about to fix their problems if the Navi leaks are any indication.. Nvidia, not so much.. granted there are no leaks of future desings.
Maybe Nvidia will cut prices in their sans RTX cards, announced ones already seem high to me, but whatever.

Also, How is it that it is all China China, the Chinese aren't even trying too hard to screw us over, wonder what things would look like if they did.
 
Donald Bell said:
AMD's stock took a dip at the same time as NV's Q4 guidance. Good time to buy.
Click to expand...

Normally I'd agree, but given we're likely very close to a recession starting, I'd stay away for a bit. As it is, I'm hiding out in Bonds until the next recession gets under way, THEN I'll go on a purchasing frenzy.
 
NVidia did it to themselves. Pure and simple they grew fat off of the Cryptomining wars of 2017-2018 and never realized that it ended. They've kept their heads ensconced firmly into their own anuses like a rectal ostrich when it comes to the rise and fall of crypto mining. They thought that the prices for GPU's would remain high due to the insane demand but that demand dropped out, which was predicted to happen and we didn't even need Nostradamus to predict it. Now there is a huge influx of second hand mining cards on the market in Craigslist, Kijiji, eBay and 50 different B/S/T boards for a fraction of the cost of the new model cards which apparently have a spectacular failure rate for such a premium product. Almost like Tesla at every turn in the news.

Maybe they'll gain the ability to see into their failing future and drop prices down to the level which everyone else lives at : Realism
 
Uvaman2 said:
I don't think any stock has been priced 'realistically' since the 1980s, but..
Nvidia is a one-trick pony.. one trick in what will soon be a crowded pony show.
In 1 or 2 years, unless they have some miracle technology, the only thing they will lead on will be gaming, and if their high prices are any indication, ALL they will have is a meaningless performance crown... in low volume products.
Right now Nvidia is stuck in a cycle of inefficiency, the 20x series are huge dies, probably with bad yields, yes they are high performance, but its brute force approach of old gains.
AMD is suffering the same fate, made even worse due to HBM, which seems will never go down in price.
AMD however is about to fix their problems if the Navi leaks are any indication.. Nvidia, not so much.. granted there are no leaks of future desings.
Maybe Nvidia will cut prices in their sans RTX cards, announced ones already seem high to me, but whatever.

Also, How is it that it is all China China, the Chinese aren't even trying too hard to screw us over, wonder what things would look like if they did.
Click to expand...

They made rivers of money selling deep learning kit to data centers but here's the rub: there are dozens of new entrants to this market, from startups all the way up to big guys like Intel (although I can't see them getting anywhere at all) Not just that but they're all pushing products that are *purely* for deep learning, not gpus that do compute. They're not burdened with being dual-use and you have to look at that and conclude that at some point nvidia will get left behind, leaving them as 'just' a gaming gpu and CaD gpu vendor. The other elephant in the room is that amazon and Google make their own deep learning hardware and apparently it's very fast. Today you can rent time using one remotely. What happens tomorrow if they push them in number onto the open market? In my eyes the medium term outlook for nvidia in the data centre looks bleak.
 
Donald Bell said:
AMD's stock took a dip at the same time as NV's Q4 guidance. Good time to buy.
Click to expand...
You think AMD's $700 Radeon VII has anything to do with this? Also, how's Nvidia's $350 RTX 2060 working out for them?

Ididar said:
With 2080's and 1080's running at $1600 to $1800 CDN ... not a chance I'm buying a new video card anytime soon. I had planned to upgrade but not at these prices.
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I was just playing Deus Ex Mankind Divided and have an issue with the game causing a BSOD and I'm finding posts from 1070 owners from 2016. How old are these cards already? The RTX 2060 is the same price and performance of a GTX 1070? Time for Nvidia to put down the crack pipe already.
 
Honestly my view of Nvidia in the future is that of a starving dog in the winter. They don't have lasting partnerships, they are about to face stiff competition is markets that are growing, and their CEO seems to be a hardass that loves closed source shit as well as they seem to be an acquire to destroy type company ( as opposed to acquire and expand). If their line up looks like it looks now in 1 or 2 years i expect a dead cat bounce, and more steady declines... If it looks like it does now in more than 2 years, nvidia will be like pre ryzen AMD, perhaps with more liquidity, but with the same bleak outlook.
Yeah, maybe my view is extreme..
 
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Yeah like to see gougers pay. 2080ti is 2000 bucks about 1700 on craigslist. Just insane prices for Canadians. Wont even guess price rtx Tian up here. Definite think AMD equivelant will be one to watch.
 
Uvaman2 said:
Honestly my view of Nvidia in the future is that of a starving dog in the winter. They don't have lasting partnerships, they are about to face stiff competition is markets that are growing, and their CEO seems to be a hardass that loves closed source shit as well as they seem to be an acquire to destroy type company ( as opposed to acquire and expand). If their line up looks like it looks now in 1 or 2 years i expect a dead cat bounce, and more steady declines... If it looks like it does now in more than 2 years, nvidia will be like pre ryzen AMD, perhaps with more liquidity, but with the same bleak outlook.
Yeah, maybe my view is extreme..
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I think it's unlikely but within the realm of possibility. AMD needs to bring the same heat to NVIDIA that they have to Intel. $1200 flagship "consumer" GPUs are just insane.
 
Is that Jim Kramer? Is he still doing finance crap? No more mad money press the big button showmanship? :D
 
sleepybp said:
That's cool dude.
Which do you think has a larger total addressable market, gaming GPU's, or data center CPU's?
My money is on the data center and AMD Epyc cpus.
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What does this have to do with my statement, which was extremely limited in scope? Unless you are saying that AMD will make more money with EPYC than Nvidia will make in gaming next quarter, in which case I would be happy to put money down against such a proposition occurring.
 
It's the datacenter deals that tanked their outlook mostly, Amazon and Microsoft are holding off on card replacements as there is not a large enough power/performance gain moving to their new stuff and they both want to see what AMD is bringing to the table as their new architectures look promising.
 
Huh, I thought they were over the hump by now, with their inventory issues and crypto-mining hangover already factored in to the stock price.

Lakados said:
It's the datacenter deals that tanked their outlook mostly, Amazon and Microsoft are holding off on card replacements as there is not a large enough power/performance gain moving to their new stuff and they both want to see what AMD is bringing to the table as their new architectures look promising.
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Ahh. How are their products used in the datacenter? Massive render farms? I would have expected that all of the streaming game services that have been announced lately would have benefitted Nvidia as something needs to render those in the cloud, and Nvidia has what seems to my laymans eyes like the most advanced enterprise virtualized rendering solutions on the market.
 
techguymaxc said:
Even after cutting guidance they're still going to make more money than AMD this quarter.
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Yeah, so this - to me - is more of a correction in the markets unrealistic expectations for Nvidia. The companies fundamentals still seems strong. They are not going to be hurting for operating budget or R&D spending any time soon. The stock price is dropping and investors will be pissed though, even though they should have seen this coming,, and have no one to blame but themselves.

Nvidia scaled up to take advantage of the crypto-boom, and now have to scale back after the crypto-bust. They might have been able to manage it a little bit more proactively to avoid the inventory issue, but that would have been a really tough thing to do. Nvidia doesn't control how popular crypto-mining is.

Uneducated large investors will likely demand that heads roll, but if they do they will be wrong. While I disagree with many of Nvidias business practices, generally it is a pretty well run company, and they would be doing themselves a disservice by demanding a shakeup.
 
Uvaman2 said:
I don't think any stock has been priced 'realistically' since the 1980s, but..
Nvidia is a one-trick pony.. one trick in what will soon be a crowded pony show.
In 1 or 2 years, unless they have some miracle technology, the only thing they will lead on will be gaming, and if their high prices are any indication, ALL they will have is a meaningless performance crown... in low volume products.
Right now Nvidia is stuck in a cycle of inefficiency, the 20x series are huge dies, probably with bad yields, yes they are high performance, but its brute force approach of old gains.
AMD is suffering the same fate, made even worse due to HBM, which seems will never go down in price.
AMD however is about to fix their problems if the Navi leaks are any indication.. Nvidia, not so much.. granted there are no leaks of future desings.
Maybe Nvidia will cut prices in their sans RTX cards, announced ones already seem high to me, but whatever.

Also, How is it that it is all China China, the Chinese aren't even trying too hard to screw us over, wonder what things would look like if they did.
Click to expand...

China outnumbers Americans like 4 to 1. A tiny blip at those numbers are equivalent to a major upheaval in the us market. China plus india outnumber Americans 10 to 1. If 1 out of 10 chinese/indian homes decide to go buy a sofa it's like. Every home in America went and bought a new sofa. The strain on an inflexible and tight modern supply chain in every single area cannot be overstated.

Add on modern tax, finance, and accounting games where surplus inventory is a drag on any business, it's a recipe for constant wild fluctuations.
 
"Uneducated large investors"

There you hit the Achilles heel of modern wall street finanace. People with investment and say in company who know jack shit about the business.
 
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