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(Reuters) -Graphics chip designer Nvidia (NASDAQ:NVDA) Corp on Wednesday forecast a sharp drop in revenue in the current quarter on the back of a weak gaming industry.
The company said it expected third quarter revenue of $5.90 billion, down 17% on year, but said the declines would be partially offset by growth in the data center and automotive business.
“We are navigating our supply chain transitions in a challenging macro environment and we will get through this,” Nvidia’s chief executive Jensen Huang said in an earnings statement.
Nvidia’s shares dipped 2.8% in after hours trading, with second quarter revenue of $6.70 billion significantly lower than the $8.10 billion Nvidia forecast in May.
Its gaming division posted revenue of $2.04 billion, down 33% year on year. Data center revenue held up with $3.81 billion, up 61% year on year.
The gaming industry has been showing signs of weakness as consumers pull back from discretionary purchases such as video-gaming gear amid decades-high inflation.
Chipmakers have also been struggling with supply-chain snarls ahead of the key holiday period due to the Russia-Ukraine conflict and COVID-19 curbs in China’s manufacturing hubs.
