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Nvidia Faces $ 20 Billion Wipeout as Cryptocurrency & # 39; Hangover & # 39; Meet Q4 Outlook

Nvidia Corp. (NVDA) shares were sharply lower in trade before marketing on Friday after the chip maker had weaker than…

Nvidia Corp. (NVDA) shares were sharply lower in trade before marketing on Friday after the chip maker had weaker than expected sales in the third quarter and released a gloomy quarterly quarter, as inventories increased as demand cuts from cryptocurrency miners.

Nvidia said that revenues for the three months ending in January, the company’s fourth quarter, should rise to about $ 2.7 billion, well shy of the $ 3.4 billion previously predicted by analysts, thanks in part to a decline in demand for chips used in digital currency mining and a build in game chips that had become too expensive for buyers in the middle of last year’s bitcoin mining boom. These outlook counteract solid third quarter earnings of $ 1

.84 per share and an increase of 20.7% in total revenue to just under $ 3.2 billion.

“We entered Q3 with unnecessary channel inventory after the cryptobak bases,” says CEO Jensen Huang to investors at a conference call late Thursday. “I hope that now that prices have stabilized, customers will come back and buy. I think that when pricing is volatile in the channel, it is likely that some people wait for prices to stabilize, and it took longer than we expected. “

The Nvidia shares were marked by 16% lower in pre-market trading on Friday, indicating an opening $ 169.99 dollar each, the lowest in more than one year and a trick of over $ 20 billion in market value from Santa Clara, California-based Technical Group.

“The major lack of guidance due to a blown channel due to crypto coin is in stark contrast to the comments about Channel Invitation from the company at the latest redemption call,” says BMO Capital Markets Ambrish Srivastava. “Our estimates and target price go lower.”

Nvidia’s perspective not only reflects ongoing concern for the health sector for the chip sector, which has seen Philadelphia Semiconductor Index shed more than 14.1% in the last six months, but also broader concerns about consumer demand.

Applied Materials Inc. (AMAT) marked 7.3% lower to $ 32.45 after the semiconductor equipment manufacturer points out weaker than expected sales in the first quarter after the negative result after the end of the trading day.

Apple Inc. (AAPL) shares were marked 0.7% lower in $ 190.10 marketing and, despite the yesterday’s 2.5% recovery, have fallen more than 18% since the beginning of October in peak times in succession of persistent reports of iPhone’s sales weakness and pullbacks

Investors also see the possibility that President Donald Trump will launch an additional round of $ 267 billion worth of Chinese goods, in addition to 25% $ 200 billion charges that will kick-in January 1, if talks with President Xi Jinping later this month in Argentina proves fruitless.

Analysts have said that the next phase of tariffs is likely to include a significant portion of consumer goods, including Apple iPhones, which will raise prices and stumble demand in the world’s largest economy.

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