Nvidia's Warning Doesn't Alter Our Long-Term Positive Outlook; Shares Undervalued

On Aug. 8, Nvidia announced preliminary second-quarter results that included revenue of about $6.7 billion, well short of management’s original guidance of $8.1 billion. The primary driver of the shortfall was weakness in the gaming segment (down 44% sequentially and 33% year over year to $2 billion). We had been anticipating a slowdown in the gaming segment following the crash in cryptocurrency prices and associated mining demand as well as weaker macroeconomic conditions, and we previously had gaming sales sequentially declining for the remainder of 2022.