Nvidia shares fall after chip maker lowers revenue forecast
By APThursday, July 29, 2010
Ahead of the Bell: Nvidia shares fall
NEW YORK — Shares of Nvidia Corp. tumbled in premarket trading Thursday after the chip maker lowered its revenue forecast for the second quarter to well below Wall Street’s expectations and was downgraded by at least one analyst.
Nvidia, which makes graphics chips, said Wednesday it now expects to report revenue of $800 million to $820 million for the quarter ending Aug. 1. That’s down from its earlier forecast of $950 million to $970 million. Analysts polled by Thomson Reuters are expecting $951.2 million.
The company blamed a shift toward lower-priced chips and the economic weakness in Europe and China for the lowered expectations.
FBR analyst Craig Berger downgraded Nvidia to “Market Perform” from “Outperform” and said his late-May upgrade of the stock “did not pan out.” That’s in part because Apple may “expel Nvidia’s chipsets from its PCs sooner than expected” and global PC production forecasts are “still getting squeezed” by the weak economy.
The analyst called the magnitude of the miss “surprisingly large.”
Shares of Santa Clara, Calif.-based Nvidia fell 75 cents, or 7.4 percent, to $9.38 in premarket trading Thursday. The stock had closed at $10.13 on Wednesday.
