Nvidia CEO Calls Q4 Earnings "Unusually Turbulent" and "Disappointing"
As a result of low RTX graphics card sales and some data center deal delays, Nvidia lowered their projections for their Q4 financial report.
Nvidia released an updated version of its Q4 2019 financial estimate on Monday and signaled that the company’s earnings were far below expectations: lowering their projections from $2.70 billion to $2.20 billion citing low gaming and data center revenue.
Nvidia CEO Jensen Huang called the company’s Q4 earnings “extraordinary, unusually turbulent, and disappointing.”
In 2018, Nvidia unveiled their latest line of graphics cards featuring RTX (ray tracing) technology, though customers (myself included) were reluctant to purchase them at the current price point, according to the report.
September saw the release of the $800 RTX 2080 and the flagship $1,200 RTX 2080 Ti. Though the ray tracing technology recently became available for $350 on the RTX 2060, the card itself only outputs a roughly 10 percent increase over the tried and true GTX 1070, making upgrading a computer’s GPU extremely unattractive.
In addition to their unattractive price point, Nvidia acknowledges that consumers were hesitant to invest in technology that wasn’t yet being implimented into games.
“These products deliver a revolutionary leap in performance and innovation with real-time ray tracing and AI, but some customers may have delayed their purchase while waiting for lower price points and further demonstrations of RTX technology in actual games,” according to a statement from Nvidia.
Battlefield V was and is the first and only game to take advantage of ray tracing in-game so far.
Another important factor in this low estimate is the decline of cryptocurrencies. The fall in the value of popular cryptocurrencies has seen reduced demand for powerful GPUs for use in mining.
Nvidia’s data center revenue is also a cause for the shortened projections.
“A number of deals in the company’s forecast did not close in the last month of the quarter as customers shifted to a more cautious approach.” Nvidia’s statement read. “Despite these near-term headwinds…the company believes its competitive position is intact.”
The company is set to announce their Q4 2019 financial results and fiscal plans for 2020 in an earnings call on February 14.