Nvidia Plummets Following Lower-Than-Expected Q4 Sales Guidance

NVIDIA Corporation NVDA dropped more than 15 percent in the after-hours session following the release of its third-quarter earnings print.

What Happened

Q3 earnings came in at $1.84 per share, beating estimates by 13 cents. Sales of $3.18 billion missed the $3.24-billion estimate.

What appears to have investors hitting the sell button is Q4 sales guidance. The chipmaker expects sales of $2.7 billion — give or take 2 percent — compared to a $3.4-billion consensus analyst estimate.

Nvidia also raised its quarterly dividend from 15 cents a share to 16 cents and announced a $7-billion buyback.

"Our near-term results reflect excess channel inventory post the cryptocurrency boom, which will be corrected," Jensen Huang, founder and CEO, said in the press release. "Our market position and growth opportunities are stronger than ever."

What's Next

Nvidia has made some huge moves following Q3 earnings reports, so traders should be prepared for the potential for major volatility. Benzinga's Wayne Duggan reported that over the past 15 quarters, Nvidia's stock has averaged a one-day move of plus or minus 9.6 percent.

At time of publication, Nvidia shares were down 16.2 percent at $169.69 in Thursday's after hours session.

Several chip stocks fell in sympathy. At the time of publication:

• Advanced Micro Devices, Inc. AMD was down 6.6 percent.
• Intel Corporation INTC was down 1.3 percent.
• Micron Technology, Inc. MU was down 3.3 percent.

Related Links:

How Nvidia Historically Trades Following Earnings

Goldman Sachs Adds Nvidia To 'Conviction Buy' List