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Nvidia Shares Drop 7% Amidst Slowing Gaming Market

Despite a first quarter revenue that exceeded market expectations, chip designer Nvidia Corp still saw their shares plummet 6.7% in extended trading through this year’s first quarter. Shares are down about 40% this year coupled with a wider selloff in growth stocks due to aggressive interest rate increases levied by the US Federal Reserve.

Nvidia forecasted its chip sales would decline further in the current quarter, and CEO Jensen Huang revealed that the company’s gaming business revenue would post a percentage-drop as well.

“Overall the gaming market is slowing,” said Huang.

Nvidia also forecast second-quarter revenue of $8.1 billion, less than the $8.45 projected by analysts. The lower numbers reflect an estimated reduction of around $500 million due to the war in the Ukraine and COVID-19 lockdowns in China.

The company also cited a struggling crypto market which hurt demand for its GPUs.

But Nvidia has made good money from data center clients as more firms shift to the cloud, with revenue from that branch bringing in a record $3.75 billion, up 83% year on year.

So while the gaming market has slowed considerably, Nvidia is still finding other ways to make money. And once the automobile industry gets back on track, the company should find itself in a very enviable position once again.

(All information was provided by Reuters)

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