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NVIDIA’s Revenue Tanked 24%, but Its Stock Popped 8%

NVIDIA’s revenue fell 24%, but investors had feared worse

On February 14, chip maker NVIDIA (NVDA) announced its fiscal 2019 fourth-quarter earnings results for the quarter that ended on January 27, 2019.

The company already warned earlier this month that the slowdown in China had adversely affected its growth.

NVDA Q4 19 rev growht

NVIDIA’s reported revenue of $2.21 billion in the fourth quarter marked a 24.1% fall from the corresponding quarter of the previous year. This was in line with the guidance the company gave earlier this month. However, NVIDIA stock popped 8% in after-hours trading on February 14, as investors had expected worse results. The company expects to generate revenue of ~$2.2 billion in the current quarter and flat to slightly negative revenue this year compared to last year.

As the graph above shows, NVIDIA’s revenue growth was robust for several quarters before slowing down in the last few quarters ahead of its drastic decline in revenue.

NVIDIA’s net profit plunged 48%

The company’s revenue was driven by the demand for its chips for cryptocurrency mining purposes. Cryptocurrencies peaked in December 2017 before tanking and losing a massive chunk of their market share over the last year.

The cryptocurrency bust also led to a severe decline in demand for cryptocurrencies, which adversely affected the demand for NVIDIA’s chips, which were used for crypto mining.

The company’s net profit tanked 48% year-over-year to $567 million, or $0.92 per share, in the fourth quarter of fiscal 2019. On an adjusted basis, the company made $0.80 per share, higher than Wall Street’s estimate of $0.75 per share.

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