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Technology Stocks : Semi Equipment Analysis
SOXX 296.74+1.8%Nov 28 4:00 PM EST
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From: Sam1/28/2019 11:00:21 AM
1 Recommendation

Recommended By
Donald Wennerstrom

   of 95487
 
nVidia shareholder letter.
The story of the quarter appears to be that China collapsed and everybody got nervous.

nvidianews.nvidia.com

The Q4 guidance we provided in November reflected the effect of excess channel inventory of Pascal
mid-range GPUs that resulted from the sharp decline of cryptocurrency demand. We delayed the
planned production ramp of several new products to allow excess channel inventory to deplete, which
resulted in the significantly lowered Q4 guidance. Exiting Q3, we estimated channel inventory would be
largely depleted within one to two quarters, or between February and April. Our view of that today
remains unchanged.


As we worked through Q4, the global economy decelerated sharply, particularly in China, affecting
consumer demand for NVIDIA gaming GPUs. Also, with initial shipments of new high-end RTX GPUs
selling above MSRP, some customers may have delayed their purchase while waiting for lower price
points and further demonstrations of RTX technology in actual games.


Datacenter customers buy NVIDIA GPUs for high performance computing, to train deep learning AI
models, and to offer as a cloud computing service. Purchases can be large and are not always periodic or

predictable. As the quarter progressed, customers around the world became increasingly cautious due to economic uncertainties. A number of deals did not close in the last month of the quarter.


[h/t Slacker]

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