Nvidia Voyager (photo credit: Nvidia / )
(AOF) – Nvidia, whose chips are particularly sought after to provide the computing power necessary for artificial intelligence, will present its results for the second quarter. The technology group had stunned the financial community in May by presenting a revenue outlook more than 50% higher than expected for the second quarter. Nvidia is taking advantage of strong demand for the chips needed for the latest wave of generative artificial intelligence systems, such as ChatGPT.
For the second quarter, Nvidia expects an average turnover of 11 billion dollars against 6.70 billion dollars a year earlier. The adjusted gross margin is expected to average 70% versus 45.9% a year earlier.
Yesterday, the action hit a new all-time high at 481.74 before ending in the red. Nvidia weighs more than 1,100 billion dollars on the stock market.
This release will impact the entire market and not just Nvidia’s stock. The promises of the latter have been at the origin of the strong progression of the Nasdaq since the beginning of the year.
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Growing market and price pressures
According to the SIA, global chip sales were $151.7 billion in the first quarter of 2022, up 23% year-on-year. Sales increased in all major regional markets and for all product categories. As global uncertainties, including the war in Ukraine and the health crisis, weigh on supply chains, demand for semiconductors continues to significantly outpace supply. Manufacturers Samsung and TSMC have announced that they will raise their prices, in a context where players in the sector have good leeway and benefit from increased bargaining power. However, wage increases and component prices could weigh on future performance.
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Another historic decline in computer sales
After having already suffered a sharp setback last year, the market is faced with demand that remains weak. Supply is suffering from excess inventory, which is impacting prices. According to IDC, PC sales fell another 29% in the first quarter, to less than 57 million units. This is much less than the 59.2 million devices sold over the same period in 2019, before the Covid. Demand is down for individuals and businesses, which have equipped themselves with the boom in telework. The continued rise in interest rates in the United States and Europe, and its impact on inflation, is also penalizing. Among the market leaders, Lenovo, Dell and Asus posted volume declines of more than 30%. HP recorded sales down 24%. Apple faced the biggest drop, with sales plummeting more than 40% year-on-year. The Californian group could suffer from its rather high-end positioning.