Tech

Nvidia warned of weak earnings, and more chip stocks fell with it

Key Points
  • Nvidia fell after it lowers its revenue guidance for its fourth quarter 2018 on Monday.
  • Other chip stocks tanked on the news as well.
  • Nvidia cites “deteriorating macroeconomic conditions, particularly in China” as part of the reason for the update.
Nvidia CEO Jensen Huang.
Source: Nvidia

Chip stocks took a tumble Monday after Nvidia lowered its guidance for its fourth quarter 2018.

The company revised its quarterly revenue guidance from $2.70 billion to $2.20 billion due in part to "deteriorating macroeconomic conditions, particularly in China," it said in a statement. Nvidia fell 13.8 percent on Monday.

Other chip stocks fell on the news as well. Advanced Micro Devices dropped 8 percent, and Mellanox Technologies fell more than 3 percent. Chip stocks had been on the rise just last week after four companies beat earnings expectations for the quarter. Twenty-nine out of 30 stocks on the PHLX Semiconductor Index were positive on Jan. 24, marking the index's seventh-best day in a decade. The index fell more than 2 percent on Monday.

Nvidia's statement Monday morning adds to growing concerns about the Chinese economy. Apple also cited slowdowns in the Chinese market when it issued its own revenue warning earlier this month.

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