Nvidia : Down 40% Year-To-Date, Caution Ahead ⚠️
Nvidia, the most valuable U.S. semiconductor company, is in a big rut. This week, the chip maker cut its guidance versus analysts’ estimates for the third consecutive time over the past three months, blaming a softening economic environment and a sharp slowdown in demand for its gaming graphics cards.
While some investors are hopeful for a quick turnaround, I’m skeptical. Nvidia (ticker: NVDA) is facing multiple threats, including rising competition, an unsustainable pricing structure, and a potential crypto used-card glut that will be difficult to overcome.
On Wednesday, Nvidia gave a forecast for the October quarter that was significantly below expectations, projecting a revenue range with a midpoint of $5.9 billion, compared with the $6.9 billion consensus. The weak outlook came after Nvidia preannounced another miss earlier this month when it said it would report $6.7 billion in revenue for the July quarter, versus its $8.1 billion guidance in May.
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