NVIDIA stock price continues to slide after earnings and revenue post decline in Q2

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NVIDIA Corp. (NVDA) listed on the Nasdaq stock exchange is down more than 40% since January 2022. Recently announced quarterly results failed to sustain momentum after management warned of tougher times ahead. “We are navigating our supply chain transitions in a challenging macroeconomic environment and we will get through it,” said Jensen Huang, Founder and CEO of NVIDIA. NVDA’s stock price is down 4.24% in the past month.

Since April 2020, NVDA stock price had climbed to cross $330 at one point. After reaching a market capitalization of nearly $1 trillion, the company currently has a valuation of $430 billion. However, according to experts, NVDA stock is still highly valued.

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The company reported revenue of $6.70 billion for the second quarter ended July 31, 2022, up 3% from a year ago and down 19% from the prior quarter . Earnings fell sharply after GAAP earnings per diluted share for the quarter were $0.26, down 72% from a year ago and 59% from the prior quarter.

NVIDIA’s Gaming segment posted revenue of $2.04 billion in the second quarter, down 33% from a year ago and 44% from the previous quarter.

NVIDIA will pay its next quarterly cash dividend of $0.04 per share on September 29, 2022 to all shareholders of record on September 8, 2022.

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NVIDIA expects to continue share buybacks in fiscal year 2022-23. In the second quarter of fiscal 2023, NVIDIA returned $3.44 billion in stock buybacks and cash dividends to shareholders, following a first-quarter return of $2.10 billion. The company has $11.93 billion remaining under its share buyback authorization through December 2023.

NVIDIA’s outlook for the third quarter of fiscal 2023 calls for revenue of $5.90 billion, plus or minus 2%. Gaming and professional visualization revenues are expected to decline sequentially as OEMs and channel partners reduce inventory levels to align with current levels of demand and prepare for NVIDIA’s next generation of products .

The company had previously blamed a drop in demand for chips used in gaming computers due to tough market conditions. The demand for chips and the fortunes of the semiconductor industry depend very much on the path technology takes in the future.

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