Nvidia stock rebounds after chipmaker reported revenue hit from China, Russia
Yahoo Finance Live anchors discuss the stock rebound for chipmaker Nvidia.
Video Transcript
AKIKO FUJITA: Shares are bouncing back this morning, despite the company announcing it would slow hiring and cut expenses on a light forecast for its current quarter. Now they're saying the forecast for this quarter, $8.1 billion, which came in below what analysts were expecting. A few things to highlight here, which is something that we've heard from other tech companies as well. A $500 million impact from China and Russia combined, $100 million impact from Russia on gaming specifically, and then on China, $400 million.
And this is one where they're getting hit both on the supply side and the demand side. Supply side story, we know they've undergone the shutdown over in China. That has brought manufacturing overall to a halt there. But the demand side, to me, is an interesting one, too, because they've talked about gaming demand declining in Q2. A big chunk of that they're attributing to China.
BRIAN CHEUNG: Yeah, yeah. I mean, the thing, though, is this stock was down, I think, 9% after hours when they reported yesterday. Now we see the stock going up. I mean, obviously, green across the board in the broad indices. But it seems like chipmaker investors are a little bit all over the place on this story because it's so noisy. And again, the China lockdown, world's second largest economy, that demand story has been very, very kind of shaky.
But what's really interesting, I saw this note from Bank of America that talked about a 3% GDP rule. And because I think of the world in GDP numbers, this kind of is interesting to me specifically. But with the exception of the calendar year 2012, apparently, semiconductor sales have never been negative when global GDP was greater than 3%, which the IMF, the World Bank, other types of projections for global GDP, they're saying it's going to be above that this year. So glean of that what you will, but there is some tie-in between just the global macroeconomic picture, even just from an output standpoint, and the demand for chips.
AKIKO FUJITA: Well, when you look at Nvidia, though, I mean, you could argue, right, in this macro environment, where is the demand going to come from? They're talking about gaming demand still remaining strong, even though they're expecting a decline in Q2. But they've also got data centers. They've also gotten-- and we've talked about this. Companies are still investing on that front. So that's kind of where they see--
BRIAN CHEUNG: Bitcoin miners, too, I mean.
AKIKO FUJITA: Well, Bitcoin miners, yes, but that comes-- that falls under the gaming graphics category for Nvidia.
BRIAN CHEUNG: I love that.
AKIKO FUJITA: They don't necessarily break it down. They don't necessarily break it down, so we don't know what the impact will be on Nvidia from the slowdown. You can imagine the company doesn't necessarily want to highlight that right now. But the data center side could potentially continue to be the driver in the offset of gaming if they are to see a slight demand on that front.
BRIAN CHEUNG: Well, unless the tech companies try to shrink, though, in this type of environment. But it's interesting. I didn't know that they don't parse out. So I guess, a person that's buying a PS5 just to play "Horizon" is equal to them as someone that's, like, mining Bitcoin.
AKIKO FUJITA: Well, at least--
BRIAN CHEUNG: I mean, it's the same demographic.
AKIKO FUJITA: --within the earnings report, right? We're going to bring Dan Howley on, who can probably break it down on every level for us. But those are the two categories that we're watching.
