Nvidia stock falls the most in four years
Company's share price falls USD 5.54 a piece to USD 12.49 following a cut to its revenue forecasts
Nvidia saw its stock fall by 31 per cent, the biggest drop for four years, after the company cut its second quarter revenue and gross margin forecasts.
The California-based graphics chip maker said in a statement yesterday that sales this quarter will be lower than expected, between USD 875 million - USD 975 million.
In response to this news the company's shares fell in the New York stock exchange by USD 5.54, or 30.73 per cent, to USD 12.49 - down from the previous day's close price of USD 18.03, reports Bloomburg. Nasdaq trading has now closed for a US holiday today.
This was further compounded by news that Nvidia would face a cost of USD 150 million to USD 200 million to cover anticipated warranty, repair, return and replacement due to manufacturing errors in its previous generation GPU and MCP products used in laptops.
"Although the failure appears related to the combination of the interaction between the chip material set and system design, we have a responsibility to our customers and will take our part in resolving this problem," said Nvidia's president and CEO Jen-Hsun Huang.
"This has been a challenging experience for us. However, the lessons we've learned will help us build far more robust products in the future, and become a more valuable system design partner to our customers."
"As for the present, we have switched production to a more robust die/package material set and are working proactively with our OEM partners to develop system management software that will provide better thermal management to the GPU," Huang added.