Shares of semiconductor leader Nvidia (NASDAQ: NVDA) were under pressure today, down 3.4% as of 12:30 p.m. ET. There was no company-specific news causing the slump in stock price. However, after a multi-week rally off of lows in late June, tech stocks in general were taking a breather. The Nasdaq Composite was down 1.4%. 

Nvidia stock has actually been quite resilient in recent weeks after revealing its preliminary financial results for Q2 2023 (the three-month period ended in July). Including today's drop, shares are actually slightly up since the company announced Q2 revenue would only be $6.7 billion, not the $8.1 billion originally forecasted.  

Consumer electronics sales, especially PCs and laptops, are headed for decline in the back half of 2022. This is putting a dent in the company's gaming GPU (graphics processing unit) sales for high-end video game graphics. To help move inventory, Nvidia and its retail partners have been cutting prices. Besides a big decline in revenue, it also led to a big drop in profit. Adjusted gross margin on products sold is expected to be about 46%, far lower than the 67% originally expected. Ouch!

Continue reading

Source Fool.com