Nvidia has been experiencing a softness in GPU demand for a
quite a while and this is likely to hurt the top line and bottom line results
for the first quarter. The ongoing trade tensions between the US and China are
another issue. China is a large market for Nvidia and the difficulties caused
by the trade war might affect sales.
Despite these difficulties, Nvidia might see growth from areas
such as ray-tracing technology, which is already seeing good demand. This could
bring optimism in an otherwise bleak scenario.
In the fourth quarter of 2019, Nvidia reported mixed results. Revenues fell 24% to $2.21 billion and missed Street estimates while adjusted EPS declined 53% to $0.80 but managed to top expectations.
For the first quarter of 2020, Nvidia has guided for revenues of $2.20 billion, plus or minus 2%, and gross margin of 58.8%, plus or minus 50 basis points.
Nvidia’s shares have gained over 19% so far this year. The stock was down 5% in afternoon trade on Monday.