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Goldman Sachs has just published an announcement in which it was admitted that its recent optimistic evaluation of the title Nvidia was wrong. Toshiya Hari, the goldman Sach's chip analyst, went so far as to remove Nvidia from the list of the best ideas.
According to Hari, the firm was definitely wrong about the stock, first underestimating the importance of building the channel inventory for the mid-range gaming processing units. This inventory correction, he continues, is only a one-time reset; This is not a change in the long-term growth profile of the security. In addition, he notes that it may take another six months before the market can correct to regain confidence in the growth trajectory of the company.
Thursday, at the close of the market, Nvidia released its financial report for the third quarter, indicating a business turnover of about 3.18 billion dollars. That was more than $ 3 billion less than the average forecast. In addition, the popular chip maker expects a significantly lower sales range, which is expected to generate about $ 2.7 billion by January by ± 2%, against a $ 3.4 billion consensus in Wall Street.
Nvidia attributes the weakness of forecasts to surplus stocks in the distribution network, especially after the mining boom of the cryptocurrency at the beginning of the year. You see, cryptocurrency miners use AMD (Advanced Micro Devices) and Nvidia-based graphics cards to hunt and collect new bitcoins, which can then be sold or protected for future appreciation.
Demand in the mining sector has declined recently due to the steady decline in prices in digital currency. It is also very important to note that Nvidia had a $ 57 million charge due to lower demand for cryptocurrency in the third quarter.
It should also be noted that Nvidia is just one of many technology titles that was hit hard in October. Indeed, it was the worst month for the entire Nasdaq Composite Index since 2008. Fortunately, the stock has risen 4% since the first of the year.
Overall, Nvidia's shares are down 18.7% and now stand at $ 164.55.
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