Nvidia slumps as weak Q3 forecast signals ongoing gaming, PC weakness
Justin Sullivan

Nvidia (NASDAQ:NVDA) slumped almost 5% in extended-hours trading after the semiconductor giant issued a weak forecast for the third-quarter, citing ongoing declines in the PC space. 
For the upcoming quarter, Nvidia (NVDA) said it expects revenue to be $5.9B, plus or minus 2%, well below the consensus of $6.92B. It also expects adjusted gross margins of 65%, plus or minus 0.5%.
The Jensen Huang-led Nvidia (NVDA) said gaming and professional visualization revenue are expected to decline sequentially, noting that PC and channel partners are reducing inventory "to align with current levels of demand and prepare for NVIDIAâs new product generation."
On the company's earnings call, CFO Colette Kress said some of the decline in gaming revenue was related to the decline in cryptocurrencies, but at this point, it's unclear the exact amount.
Kress added that the company has "undershipped" gaming when looking at the second-quarter results and third-quarter guidance to the tune of roughly $5B. 
Huang added that although sell-through is off the highs, it's still very solid, with demand having increased 70% since before the pandemic. "The fundamentals of gaming are strong and the medium is doing well," he explained, noting that the company is focused on letting inventory "correct." 
The company caveated that however, adding that the decline in gaming and professional visualization would be "partially offset" by continued growth in its data center and automotive businesses.
âWe are navigating our supply chain transitions in a challenging macro environment and we will get through this,â said Huang, founder and CEO of NVIDIA (NVDA), in a statement.
For the second-quarter, Nvidia (NVDA) said it earned an adjusted 51 cents per share on $6.7B in revenue, including $3.81B in data center sales. Gaming-related revenue fell 33% year-over-year to $2.04B.
Nvidia (NVDA) issued a preliminary report concerning its second-quarter results earlier this month.
Last week, Bank of America said another guide-down from the Jensen Huang-led Nvidia (NVDA) might result in a "necessary reset" as it gets ready to launch its 5-nanometer line of products.