What's going on?

Nvidia reported its best quarterly revenue ever earlier this week, but the future doesn’t exactly look straightforward for the US chipmaker.

What does this mean?

Nvidia�s gaming business boosted its revenue by 31% last quarter from the same time last year, with its graphics chips making their way into everything from laptops to Nintendo Switches. The company�s data center business one-upped even that, growing its revenue by 83% as more firms switched to the cloud and AI solutions. So even a drop in its automotive and crypto mining chips � caused by cuts in car production and the drop in the crypto market � couldn�t drag on results too much: overall sales still grew by a better-than-expected 46% to a new quarterly record.

But that streak looks like it�s at an end: Nvidia said it�ll need to limit costs in a �challenging economic environment�, and gave a disappointing revenue outlook for this quarter too. So investors didn�t much care about last quarter�s successes: they sent its stock down 10% after the announcement.

Why should I care?

For markets: Is Nvidia going cheap?
It wasn�t long ago that Nvidia was being touted as the next $1 trillion company, but the tech stock collapse has made that prospect a thing of the past (tweet this). Its stock has since tumbled 50% from its all-time high in November, meaning its market value is now closer to the $400 billion mark. In fact, it�s now so far from its peak that analysts reckon it could be good value: they�re expecting the stock to return an average of 87% over the next 12 months.

The bigger picture: The old-new normal.
Intel reiterated this week that it�s expecting the chip shortage to continue well into 2024, but Nvidia�s seeing signs that this cold war is starting to thaw: the company said that inventory of its gaming graphics chips � which have been particularly difficult to get hold of over the past year � had �normalized�.