![]() Demand from enterprise end-users continues to be robust. Revenue for the segment is expected to jump 61% year-over-year. How so? Gaming results for Q2 may be disappointing, but it could be a different story with its data center results. The latest numbers from Nvidia could help to back this view. However, as I argued at the start of August, its strength in some areas (like cloud computing), could outweigh weakness in other areas (like gaming). The preliminary earnings for NVDA stock helped to briefly give credence to the bearish view that, as economic growth slows down compared to the boom times of 2021, the company’s own growth will take a big hit. Looking more closely at recent data center results, it’s too soon to say the company’s overall prospects have taken a turn for the worse. Nevertheless, there is a key bright spot: its data center segment. A drop in demand for its GPU chips from crypto miners could also hurt its operating performance in the months ahead. This may mean more challenges before results begin to improve. Even worse, it’s possible that gaming demand was simply pulled forward during 20. ![]() The pandemic tailwinds for gaming have long since passed. This segment’s top line is set to drop 33% from the prior year’s quarter and 44% on a sequential (quarter-over-quarter) basis. The main driver behind this expected miss is a big drop in its gaming-related revenue. ![]() Given this revenue miss, it’s easy to see why NVDA stock took such a hit on the heels of this release. This figure is well below Nvidia’s prior outlook calling for $8.1 billion in revenue. For the quarter, the company expects to report $6.7 billion in revenue. It’s apt to say the figures were disappointing. 8, Nvidia released preliminary results for its second fiscal quarter (ending July 31, 2022).
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