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Shares of Nvidia Corp. plunged Friday into the worst fall in a day for more than 10 years, while a disappointing earnings report cost the graphics chip specialist more than $ 23 billion in market capitalization.
Nvidia
NVDA, -18.76%
stocks closed down nearly 19% to $ 164.43 in intensive trading, and are now down 15% for the year. Shares closed at their lowest price since September 8, 2017, at $ 163.69, and the company's market capitalization closed the day at just under $ 100 billion, at $ 99.97 billion. . The company's market capitalization was worth more than its largest competitor in the graphics processing unit, Advanced Micro Devices Inc.
AMD -3.86%
which closed on Friday with a market capitalization of less than $ 21 billion.
Not to be missed: "The hangover of the crypto" has rocked Nvidia in the holidays with a big headache
The latest Nvidia share was down on July 3, 2008, a drop of nearly 31% after the chip maker reported disappointing sales forecasts. At closing, more than 48 million shares had changed hands compared to the 52-week average daily volume of 12.9 million shares. In comparison, the PHLX Semiconductor Index
SOX, -1.17%
finished down 1.2% Friday, the S & P 500 index
SPX, + 0.22%
closed up 0.2%, and the Nasdaq Composite Index
COMP -0.15%
closed down 0.2%. AMD shares finished down 3.9%.
Last Thursday, Nvidia's Q3 results and fourth-quarter outlook were well below Wall Street's estimates, as the company said it was struggling to clean up gambling chips from its old Pascal architecture. generation as a result of the release of its new Turing chip. Earlier in the quarter, Nvidia released its next generation Turing chips for professionals and gamers.
The company attributed the problem of stocks to the passage of the crypto-currency mining craze, according to which the miners bought gambling chips and networked them on mining platforms in order to generate crypto-currencies such as as the ether.
ETHUSD, + 0.56%
But as cryptocurrency prices have barely reached the peak of last year and the cost of extracting new parts has increased, more and more miners have sold their platforms, throwing market a lot of second-hand gambling chips, such as those based on Nvidia Pascal and manufactured by AMD.
Lily: The slowing of the chip is real, but how bad will it be?
"The encrypted hangover lasted longer than expected and we were surprised by that, but it will pass," said Jensen Huang, chief executive of Nvidia, at MarketWatch in an interview Thursday afternoon.
More than half of equity analysts have reduced their price targets in response to the earnings report. On Friday morning, of the 35 analysts who cover Nvidia, 23 had overweight or buy ratings, 11 had holding scores and one had an underweight rating. Twenty analysts lowered their price targets, bringing them down to $ 286.71 on average, compared with an average of $ 285.94 before earnings.
Nvidia is forecasting revenue of $ 2.65 to $ 2.75 billion for the fourth quarter of the holiday season, while analysts on average forecast a turnover of $ 3.4 billion. On Friday morning, analysts had adjusted their revenue forecasts to $ 2.81 billion on average and the consensus on fully adjusted earnings had dropped to $ 1.49 per share, compared to an earlier estimate of $ 2.04 per share.
Craig Ellis, an analyst at FBR, Craig Ellis, has brought Nvidia back to $ 240, from $ 240 to $ 190, due to inventory issues affecting sales, a slowdown in datacenter growth and Potential issues related to the volatility of the SOX chip over several quarters. index given tariffs and the US-Chinese trade war.
"Faced with a broader SOX expectation for wavering trading over several quarters with a potential for downside bias well in NVDA's seasonal F1Q, we are moving to the margins, looking for more attractive entry points or catalysts." on the upside unmodified to become more positive, "said Ellis. .
Toshiya Hari, an analyst at Goldman Sachs, removed Nvidia from the list of his "beliefs", while retaining his purchase rating, and set $ 200 as the course of action. Hari noted:
|
We were clearly mistaken about the stock because we underestimated the scale of the channel inventory built in the mid-range game GPUs (usually about 1/3 of the business's turnover). GPU game) and, to a lesser extent, the correction in SoCs of game consoles. While we considered the inventory correction in games as a one-time reset as opposed to a change in the long-term growth profile, we believe that several months could pass before the market regains confidence in the growth trajectory of the business, particularly the unfavorable economic context (which could have a negative impact on the sale of GPU Gaming and extend the process of digestion). |
Christopher Rolland, an analyst at Susquehanna Financial Group, got a positive rating and called the problem stocks unimaginably bad and reduced his price target to 230 USD, from 230 USD to 230 USD, stressing that the situation would be difficult short term.
"Although disappointing, the crypto-bubble is temporary, but offers secular growth opportunities such as ray tracing and AI are not," said Rolland.The ray tracing helps to restore light and shadows more Realistic in a computer-generated scene, but it requires significant computing power to be rendered in real time.This is an important selling point for Nvidia's Turing chips.
Morgan Stanley analyst, Joseph Moore, who is overweight and lowered his price target to $ 260 from $ 260 to $ 220. He recently reduced his figures for the quarter to take into account the "bumps in the road of the game" that eventually turned into "mountains".
"The title will probably not bounce right away, given the severity of the missing message issued by management, which has been confident throughout the quarter that the litany of cautious data points did not signal any potential problem. in the game, "said Moore.
In addition to having to clean up his inventory, Harlan Sur, J.P. Morgan's analyst, who has been overweight and brought his price target down to $ 255 from $ 255, said do not neglect Turing's chip exit.
"Games remain important in other areas, as new releases such as Battlefield 5 and Final Fantasy show for the first time RTX's ray tracing capability and we believe NVIDIA is in the process of developing its RTX series. 20 upscale sequentially in the neighborhood, "said Sur.
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