Nvidia is about to make a big announcement during a tough time
Nvidia Corp. faces a much more troublesome environment since the last time it debuted a new chip architecture ahead of a new launch.
begins its fall GTC Monday, with General Manager Jensen Huang scheduled to deliver a keynote address Tuesday morning at 11 a.m. EST. At the same event in May 2020, Huang unveiled a new chip architecture at Ampere, and the analyst expects him to use this year’s event to unveil Ampere’s next-generation chip architecture. the company, named “Lovelace”, after the 19th century English mathematician. Ada Lovelacegenerally considered the world’s first female computer programmer for her work on Charles Babbage’s Theoretical Analytical Engine.
Ahead of the event, however, Nvidia has landed in a tough sport, with pandemic-era demand knocking its share price down in half so far this year. The company recently took an inventory charge of $1.22 billion as it seeks to eliminate old inventory ahead of launch.
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Ampere was unveiled about two months into the COVID-19 pandemic amid strong demand for gaming cards that drove the stock up 122% in 2020, compared to a 51% gain on the PHLX Semiconductor Index SOX,
Now, Nvidia is jumping into an environment of shrinking demand for games during a consumer tech crisis, and the title has fallen 55% year-to-date, compared to a 35% decline on the SOX index.
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It was this sharp drop in demand and supply chain issues that helped propel the data center into Nvidia’s largest unit with a quarterly revenue contribution of $3.81 billion, a gain down 61% year over year, against a 33% drop in game sales to $2.04 billion from a year ago, according to the company’s latest earnings report.
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“Following the July quarter report and recent revelations about licensing restrictions in China for the latest AI compute platforms, sentiment around Nvidia was surprisingly not cautious enough,” the analyst wrote. of Raymond James, Melissa Fairbanks, in a recent note.
“In particular, the inventory clearing of 3000-series GPUs continues to have a significant impact on order rates and may continue through the launch of the 4000-series,” Fairbanks said. “Vendors indicate that the actual volume ramp will be a little more moderate compared to a normal launch.
Citi Research analyst Atif Malik, who has a buy rating on Nvidia, said he expects Lovelace-based gaming chips to be available in October, which are claimed to be twice as fast. than Ampere game cards.
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Regarding data centers, Malik said Wall Street expects data center growth to slow in the quarter ending April. Recently, Tom’s gear pointed out that Nvidia’s “Hopper” H100 GPU has been tested to be more than 4.5 times faster than its own A100, citing MLCommons Machine Learning Reference Group Data.
While Malik doesn’t expect any further financial updates, he expects game sales for the quarter ending October to be slightly above Street’s consensus of $1.45 billion and in line with the consensus of $3.85 billion for data center sales.
Malik also said he would monitor the “game sales recovery trajectory and update the potential loss of $400 million in projected revenue due to COVID restrictions in China.”
During last fall’s GTC keynote, Huang presented new tools to extend Nvidia’s Omniverse platform to include interactive AI avatars and data engines to train neural networks. deep. This year’s conference lasts until Thursday and is open to the public online.