Nvidia (NVDA) Stock Down 7% despite Record Revenue in Q1 Fiscal 2023, Q2 Forecast Looks Bad

UTC by Steve Muchoki · 2 min read
Nvidia (NVDA) Stock Down 7% despite Record Revenue in Q1 Fiscal 2023, Q2 Forecast Looks Bad
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Despite the fact that Nvidia has reported record revenue in Q1, things are not looking well in the future for the tech giant.

Nvidia Corp (NASDAQ: NVDA) stock closed May 25 trading at $169.75, up 5.08 percent from the day’s opening price. However, the gains have been wiped out during the after-hours trading session. According to market data provided by MarketWatch, NVDA stock is exchanging hands at around $158.17, down 6.82 percent from Wednesday’s closing price. The sudden spike in volatility in a single day has been attributed to mixed earnings results for Q1 announced by Nvidia during the day.

Nvidia Q1 Fiscal 2023 Key Financial Highlights

According to the Nvidia Q1 report, the company recorded a revenue of $8.29 billion, up 46 percent compared to last year and 8% from the prior quarter. Nvidia beat analyst estimates of $8.10 billion during the quarter that ended on May 1, 2022.

Additionally, the company reported an Adjusted EPS of $1.36 versus the $1.29 expected by Wall Street. Worth noting, that Nvidia’s data center and gaming segment recorded the highest revenue during the first quarter. Whereby, the Data Center segment reported a revenue of $3.75 billion, up 83 percent from the prior year. And the gaming segment recorded $3.62 billion in revenue, up 31% from a year ago.

“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,” added he.

Other notable segments include automotive and robotics which recorded a revenue of $138 million. However, this was a 10 percent drop from last year.

The Stinking Part

Despite the fact that Nvidia has reported record revenue in Q1, things are not looking well in the future for the tech giant. Notably, the company has stated that the ongoing Russian invasion of Ukraine’s territory and the China lockdowns are major setbacks.

The company forecasts second-quarter revenue will be around $8.10 billion, plus or minus 2 percent. However, according to the media outlet Reuters, analysts surveyed by Refinitiv on average expected $8.45 billion.

“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,” Huang added.

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Steve Muchoki

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