Nvidia stock falls on light guidance, CFO says company will slow hiring

Nvidia's CFO Colette Kress said after the company reported fiscal first-quarter earnings on Wednesday that the company will slow its hiring pace and control expenses as it deals with a challenging macroeconomic environment.

Nvidia exceeded analyst sales and earnings expectations, but the stock dropped more than 10% in extended trading at one point after the chipmaker provided a low forecast for the current quarter.

Nvidia forecasted $8.1 billion in revenue for the current quarter, falling short of analyst expectations of $8.54 billion.

Nvidia stock has fallen by more than 43% so far in 2022, as investors avoid fast-growing stocks in favour of safer bets during a period of high inflation and macroeconomic uncertainty.

Nvidia said its revenue in the current quarter would be $500 million lower if the Russian war in Ukraine and Covid lockdowns in China had not occurred.

Nvidia, on the other hand, continues to see strong revenue growth and robust demand for its graphics processors, which are widely used for advanced gaming and artificial intelligence in the cloud.

Its total sales increased by 46% year on year, and its core businesses of data centre and gaming sales both increased during the quarter.

Nvidia's data centre business, which sells chips to cloud computing companies and enterprises, increased 83 percent year on year to $3.75 billion, outpacing the company's core gaming business, which sells graphics cards for advanced 3D games and grew 31 percent year on year to $3.62 billion.

Nvidia stated that its cryptocurrency-specific products, CMP, drove a 52 percent decline in other revenue during the quarter, as revenue was "nominal."

Nvidia announced that its board of directors has authorised an additional $15 billion in share repurchases through the end of next year. In the first quarter, it spent $2.1 billion on share buybacks and dividends.

Nvidia terminated a large purchase of Arm, a chip technology company, earlier this year. Nvidia stated that it paid a termination charge of $1.35 billion, resulting in a negative impact of 52 cents per share on a GAAP basis.