Revenue reported slightly below consensus after pre-announcing what was thought to be a kitchen sink quarter. Gross margins were well below the street, coming in at 28.4% non-GAAP with the street at 37.5%. They expect next quarter’s revenues to be flat to up slightly and gross margins in the mid-30s. Channel inventories have come down substantially to roughly 1 month of inventory on hand.
The Skew: They’re certainly set up for improvement. Again, the rate of a recovery is the big question. While Nvidia’s revenue run rates are likely to bottom out and business can improve from here, the stock at $9 is anticipating that. I think investors expected a better outlook and the gross margin dip has to give pause. It’s interesting under $8.