Nvidia's Surprise Announcement Sends Wall Street Into Turmoil

 Chip-making giant Nvidia Corp reported a 19% drop in revenue for the second quarter of this year due to slower growth in its gaming business.

The streak, shares of the company traded on Wall Street fell 8% during the closing session and indirectly weakened several indexes.

The announcement was made by Nvidia ahead of the release of its actual earnings report scheduled for August 24.

Through it, the company projected 2nd quarter (Q2) revenue to rise to $6.7 billion from $6.5 billion, but analysts predicted Nvidia could reach $8.1 billion.

Additionally, Nvidia forecast revenue for its gaming unit including sales of graphics cards for computers to decline 44% from the previous quarter at $2.04 billion.

Revealing the projection, it is in line with reports from other chipmakers such as Intel Corp, Qualcomm and Sony Group that predict a decline in sales due to concerns about demand for computers and phones.

In general, the game industry, which is considered to be 'forgotten' by the recession, is seen to be starting to weaken when consumers consider purchasing ancillary items such as game consoles.

Not to be forgotten is the supply chain issue that worsened ahead of the holiday period due to the Russia-Ukraine conflict and China's Covid-19 restrictions further straining the situation.

For that reason, JP Morgan analyst Sandeep Deshpande predicted that the negative effects could spread to the crypto market since Nvidia also produces chips for mining purposes.

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