Graphics chip leader Nvidia won’t make its projected fourth quarter sales numbers.
The company, in a statement Monday, revised its guidance from $2.7 billion to $2.2 billion, citing lower-than-expected demand and “deteriorating macroeconomic conditions, particularly in China”.
Investors quickly punished the company, with shares falling 15% in early trading.
The quarter was already expected to be less robust, as dwindling interest in cryptocurrencies meant lower demand for mid-range graphics cards, which are a key tool for many crypto miners. Also falling short were sales of Nvidia’s new, higher-end GPUs, or graphics processing units.
It’s the note about China, however, that has investors most worried. An increasing number of tech companies, including Apple, are pointing to China as a mounting economic problem area, which could have a wider influence on the sector. Other companies, including Dailmer, FedEx and Samsung are also warning China’s flagging economy and its trade war with the U.S. are negatively affecting earnings.
“Q4 was an extraordinary, unusually turbulent, and disappointing quarter,” said Jensen Huang, founder and CEO of Nvidia, in a statement. “Looking forward, we are confident in our strategies and growth drivers.”
Nvidia will report its earnings on Feb. 14. The company also said quarterly margin will be impacted due to charges to “current market conditions.”