‘Supply Challenges’ Spur Nvidia to Forecast $100M Coronavirus Revenue Hit

Nvidia expects to take a $100 million revenue hit from the coronavirus in fiscal Q1 ending late April, though it's “still early and the ultimate effect is difficult to estimate,” said Chief Financial Officer Colette Kress on a Q4 call Thursday. This “reflects what may be supply challenges” or a reduction in “overall demand,” she said. Nvidia gets about 30 percent of gaming revenue from China, she said. Q1 gaming revenue likely will decline by "low-double" digits sequentially from Q4, which ended Jan. 26, she said. China also is "a very important market" for Nvidia's data center business, she said. Revenue in that sector "moves from quarter to quarter, just based on the overall end-customer mix as well as the system builders that they may choose," she said. "It's a little harder to determine" the impact of the coronavirus impact in that sector, she said. Q4 sales rose 41 percent from the year-ago quarter to about $3.1 billion. It expects Q1 revenue to be about flat. "Discussions with China’s regulatory agency, the State Administration for Market Regulation," on the takeover of Mellanox "are progressing," and the deal likely will be completed in the early part of this calendar year, Nvidia said. The stock closed 7 percent higher Friday at $289.79.