Tuesday , May 18 2021

The stock of Nvidia sees the worst day in a decade after the gains detected the cryptography chip hangover

Nvidia Corp's stock was on its way to its worst one-day fall in a Friday decade, as more than half of the stock-market analysts reduced their price targets after the chip maker surprised investors with inventory problems Worse than expected your oldest cards.


NVDA, -18.98%

shares sunk at an intraday minus of $ 161.61, dropped around 19% to $ 164.34 in heavy trade and now declined more than 15% during the year. A closure at current levels would be the smallest finish on the stock price since September 8, 2017, when the shares closed at $ 163.69 and could push the company's market capitalization below $ 100,000 million. The last time the shares had the worst-day fall of a percentage was July 3, 2008, when stocks dropped almost 31% after the chip maker offered a disappointing sale forecast.

In the afternoon, over 42 million shares changed hands compared to the average 52-day volume of 12.9 million shares. In comparison, the PHLX Semiconductor index

SOX, -1.38%

It fell 1.4% on Friday, the S & P 500 index

SPX, + 0.31%

It rose 0.3% and the Nasdaq index consisted of technology

COMP, + 0.00%

it dropped 0.2%.

Do not miss out on: & # 39; Resaca Crypto & # 39; You have Nvidia amazed at the holidays with great headache

Last Thursday, Nvidia's third trimester results and fourth-quarter prospects were far short of the Wall Street estimates because the company reported having trouble clearing up the inventory of its architectural architecture chips for older generations after launch of its new Turing chip. Earlier in the quarter, Nvidia released its next-generation Turing chips for professionals and players.

The company accused the inventory problem when it passed to the cryptocritical mining craze, where miners would buy game chips and chained on mining platforms to generate encryption as ether.

ETHUSD, -1.14%

. But with encryption prices not close to the peaks of last year and at the cost of the new currencies increasing, more miners sold their platforms, releasing a flood of chips of second-hand games such as Pascal's Nvidia-based chips and those manufactured by Advanced Micro Devices Inc.

AMD, -4.68%

in the market AMD shares fell 4.8%.

Read: The chip's deceleration is real, but how bad will it be?

"The cryptographic hangover lasted longer than we expected and we were surprised by that, but it will happen," said Nvidia Jensen Huang's chairman of the MarketWatch Thursday in an interview on Thursday afternoon.

On Friday morning, of the 35 analysts who covered Nvidia, 23 were overweight or bought ratings, 11 had ratings and had a weight rating. Twenty analysts reduced their price targets, which forced the average price to rise to $ 246.71 from a pre-tax average of $ 284.94.

Nvidia is preventing the fiscal third quarter – the holiday season – revenues of $ 2,655 million to $ 2,755 million, while analysts have been estimating revenues of $ 3,400 million. On Friday morning, analysts adjusted their revenue expectations to an average of $ 2.81 million, and the fully adjusted earnings consensus declined to $ 1.49 per share from a previous estimate of $ 2.04 per share .

Analysts from B. Riley FBR, Craig Ellis, lowered Nvidia to get a purchase and cut its price for $ 190 from $ 240 taking into account the inventory problems affecting sales, the slowdown in center growth of data and the possible winds with multipartile volatility in the SOX chip. Index of given rates and commercial war between EE. UU. and China.

"Against a broader SOX expectation for the multi-quarter choppy exchange with the possibilities of downgrading in the seasonally soft F1Q of NVDA, we went to the margin, we looked for more attractive entry points or unmodified leading catalysts to be more positive." said Ellis.

Goldman Sachs analyst Toshiya Hari eliminated Nvidia from the signature "list of convictions" while retaining its purchase rank and returned the stock at a price of $ 200. Hari observed:

We were clearly incorrect in stock since we underestimated the magnitude of the creation of channel inventory in the average GPA GPU (usually ~ 1/3 GPU gaming revenue) and, to a lesser extent, the fix on the SoCs game console. While we see the inventory correction in Gaming as a unique restoration against a change in the long-term growth profile, we believe it could take a few quarters before the market regained confidence in the growth path of the business, especially given the weak economic scenario (which could adversely affect the sale of GPUs by Gaming and prolong the digestion process).

The analyst at Susquehanna Financial Group, Christopher Rolland, who has a positive rating, called the "unimaginably bad" inventory problem and reduced its price target to $ 210 from $ 230, and pointed out that the pain would be in the short term.

"Although disappointing, the crypto-bubble is temporary, but the secular growth opportunities such as ray tracking and AM are not," said Rolland. Tracking mice is a way to make light and shadows more realistically in a computer-generated scene, but it needs a broad computing power to render in real time. It's a great selling point for the Nvidia Turing chips.

Morgan Stanley's analyst, Joseph Moore, who had an overweight rate and reduced his price to $ 220 from $ 260, said he had recently cut its numbers during the quarter to explain "game hits" that ended up becoming "mountains".

"The stock will probably not return immediately, due to the seriousness of the management of lost messages, expressing the confidence throughout the quarter that the litany of cautious data did not signal a possible problem in the games," said Moore.

In addition to having to clean the inventory, the analyst of J.P. Morgan, Harlan Sur, who has an overweight rating and cut his price target to $ 245 from $ 255, said he did not unlock the Turing chip launch.

"The game still stays strong in other areas, as new releases of games such as Battlefield 5 and Final Fantasy show the ability to track RTX for the first time and we believe that NVIDIA is on track to grow its RTX-20 series sequentially high-end or room, "said Mr.

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