Graphics-chip maker Nvidia (NVDA) late Wednesday missed Wall Street's earnings target on higher-than-expected sales in its fiscal third quarter. It also roughly matched estimates with its sales guidance for the current period. Nvidia stock rose in extended trading.
XThe Santa Clara, Calif.-based company earned an adjusted 58 cents a share on sales of $5.93 billion in the quarter ended Oct. 30. Analysts polled by FactSet had predicted Nvidia earnings of 71 cents a share on sales of $5.78 billion. On a year-over-year basis, Nvidia earnings fell 50% while sales slid 17%. It was the company's second straight quarter of declining earnings.
Weak demand for gaming chips pressured Nvidia's September-quarter results.
For the current quarter, Nvidia forecast revenue of $6 billion, plus or minus 2%. Wall Street was modeling $6.07 billion in sales for the fiscal fourth quarter. Sales in the year-earlier period were $7.64 billion.
Nvidia Stock Has Subpar Composite Rating
In after-hours trading on the stock market today, Nvidia stock climbed 1.8% to 162.03. During the regular session Wednesday, Nvidia stock fell 4.5% to close at 159.10.
"We are quickly adapting to the macro environment, correcting inventory levels and paving the way for new products," Chief Executive Jensen Huang said in a news release.
In the third quarter, Nvidia's data center sales rose 31% year over year to $3.83 billion. However, gaming sales plummeted 51% to $1.57 billion.
Nvidia stock ranks No. 15 out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 46 out of 99.
Earlier Wednesday, Nvidia announced a multiyear collaboration with Microsoft (MSFT) to build one of the most powerful AI supercomputers in the world. The cloud-based supercomputer will contain tens of thousands of Nvidia graphics processing units, or GPUs, along with Nvidia's networking gear and artificial intelligence software. It will run on Microsoft's Azure cloud infrastructure.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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