NVIDIA Stockplummets After Hours Following Earnings Release
Chipmaker's Results Disappoint Investors As Data Center Weakness Overshadows Gaming Growth
NVIDIA's stock price plunged in after-hours trading on Monday after the company reported disappointing financial results for the fourth quarter of fiscal 2023. The company's earnings per share missed analysts' estimates, and its revenue fell short of expectations. The primary culprit for the miss was weakness in the data center market.
NVIDIA's data center business, which includes sales of its graphics processing units (GPUs) to cloud computing providers, has been a major growth driver for the company in recent years. However, in the fourth quarter, revenue from data center declined by 6% year over year, as major cloud providers such as Amazon, Microsoft, and Google have slowed down their spending on new hardware due to concerns about a potential recession.
The weakness in data center was partially offset by strong growth in NVIDIA's gaming business. The company's revenue from gaming rose by 46% year over year, as demand for its GPUs from gamers remained strong. However, the overall financial results were not enough to satisfy investors, and the company's stock price fell by more than 6% in after-hours trading.
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