In morning trading Monday, Nvidia Corp. shares fell more than 5% after the semiconductor company disclosed that gaming sales were weak for its latest quarter.
Analysts were expecting $8.1 billion in revenue for the fiscal second quarter, whereas the company expects $6.7 billion.
Nvidia's NVDA, -8.74% previous forecast had also been $8.1 billion. Monday's announcement came weeks before Nvidia's scheduled August 24 earnings report.
Moreover, the company noted in a release that the decline in revenue was primarily due to weaker-than-expected results in the gaming sector.
Nvidia expects gaming revenue of $2.04 billion, down 44% sequentially and 33% from a year ago, and below the FactSet consensus of $3.04 billion.
In addition, the company expects revenue from data centers to reach $3.81 billion, up 1% sequentially and 61% ahead of last year, but slightly below the $3.99 billion consensus estimate by FactSet.
In light of new demand expectations, Nvidia anticipates $1.32 billion in charges for the second quarter.
For the latest quarter, Nvidia expects a generally accepted accounting principles (GAAP) gross margin of 43.2% to 44.2%, compared to a prior forecast of 64.6% to 65.6%.
Adjusted operating margins are forecast at 45.6% to 46.6%, compared to 66.6% to 67.6% earlier in the year.
Over the past 12 months, the stock has lost 11.3% against the S&P 500 SPX, 0.34% which has lost 6.1%.