Nvidia warns of lower second-quarter revenue on gaming weakness

Nvidia Corp on Monday warned its second-quarter revenue would drop by 19% from the prior quarter on weakness in its gaming business, sending the chip designer’s shares down about 5% in early trading.

The company reported preliminary results for the second-quarter just days after chipmaker Intel Corp and Sony Group Corp slashed their annual forecasts on demand concerns.

The gaming industry, largely considered to be recession proof, is beginning to see some weakness as consumers weigh purchases of discretionary items such as laptops and video game consoles.

“As we expect the macroeconomic conditions affecting sell-through to continue, we took actions with our Gaming partners to adjust channel prices and inventory,” Chief Executive Officer Jensen Huang said in a statement.