Nvidia Chief Executive says gaming dynamics are 'really solid' and should stay intact
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Nvidia (NASDAQ:NVDA) Chief Executive Jensen Huang said there doesn't appear to be any slowdown in the company's gaming segment, soothing some worries that the record results seen in the most recent quarter could be a peak.
"The underlying dynamics of the gaming industry is really solid," Huang said on the earnings call. He added that even including the situation with the war in Ukraine and Covid-related lockdowns in China, "the rest of the market is fairly robust."
Huang added that is due to 100 million new gamers coming into the PC industry in the past two years, as the format has "expanded tremendously." He credited the expanded use for PCs, including content creators and influencers, people working from home as well as the traditional gamer, all of which are driving the demand for Nvidia's (NVDA) GeForce GPUs.
Nvidia (NVDA) shares fell more than 7% to $157.52 in extended-hours trading.
The 59-year-old Huang added that the strong trends in gaming are expected to stay in the second-half of the year and while it's difficult to know when the war and Covid-related lockdowns end, the company should see little impact.
Santa Clara, California-based Nvidia (NVDA) said it expects second-quarter sales to be $8.1 billion, well below the $8.44 billion analysts were expecting. Nvidia (NVDA) attributed the shortfall to roughly a $500 million decline due to Russia's invasion of Ukraine and Covid-related lockdowns in China, including a $400 million decline from gaming.
For the period ending May 1, the Jensen Huang-led Nvidia (NVDA) said it earned $1.36 per share on $8.29 billion in sales, up 46% year-over-year, thanks to "record revenue in Data Center and Gaming."
A consensus of Wall Street analysts expected Nvidia (NVDA) to earn $1.30 per share on $8.09 billion in sales.
Earlier this month, Morgan Stanley restarted coverage on Nvidia (NVDA), calling it "one of the best growth names" in the semiconductor space.
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