Nvidia, the American multinational technology company that designs graphics processing units (GPUs) for gaming and professional markets, has reported its fourth quarter and full-year earnings, and it is not exactly rosy, at least compared to pandemic highs. The company had record quarterly revenue of $7.64 billion, including $3 billion in pure profit, in the previous year. For Q4 of its fiscal year 2023, the company forecasted that it would see just $6 billion in quarterly revenue in today’s earnings results, and that’s just about where it landed: $6.05 billion in revenue, down 21%, of which $1.4 billion was profit, down 53%. For the full year, it raked in $26.92 billion, almost identical to last year, though profit was down 55%.
The report indicates that Nvidia’s data center and automotive businesses were actually up this quarter, with record revenue for automotive of $294 million. The dip was largely in Nvidia’s graphics business, particularly gaming, which were each down 46%. That gaming decline includes “lower shipments of SOCs for game consoles,” which is code for “Nintendo isn’t selling as many Switches anymore” — it’s the only game console that uses an Nvidia chip.
Like other chipmakers, Nvidia is shipping fewer GPUs to retailers and partners instead of slashing prices. The polite phrase is “lower sell-in to partners to help align channel inventory levels with current demand expectations.” Nvidia also blamed disruptions in China due to Covid and other issues.
Every PC maker is reporting that demand for computers has tanked this past quarter, with research firm Gartner calling the 28.5% dip in shipments “the largest quarterly shipment decline since Gartner began tracking the PC market in the mid-1990s.” That was on top of the slump companies like Nvidia had already seen. And while AMD seemed optimistic this quarter that the slump won’t last for long, even it suggested that client processor and gaming revenue would continue to go down in the first half of the calendar year.

Nvidia’s CEO, Jensen Huang, spent most of the call hyping up Nvidia’s potential for data center growth, citing the rise of large language models (LLMs) used to train AI systems like ChatGPT and Bing, which often run on GPU hardware from Nvidia. He also talked up Nvidia’s work with Mercedes-Benz on “software-defined vehicles,” something many other automakers and tech companies are also pursuing, saying: “You can just imagine what it looks like if the entire Mercedes fleet on the roads today were programmable, you could OTA… the whole fleet of Mercedes would represent revenue generating opportunity.” It’s not clear whether every customer wants a software-updatable car, though: read our stories on how the future of cars is a subscription nightmare, Volkswagen’s buggy software, and a software update we wrote about literally today that temporarily turned one of the highest-rated EVs into a turtle.
Nvidia also announced yesterday that Microsoft would bring its Xbox PC games to Nvidia’s GeForce Now cloud gaming service, though Nvidia subscribers will only be able to play those games once they’ve purchased them separately. That’s how GeForce Now usually works.
Nvidia’s Q4 and full-year earnings report has shed light on the current state of the technology industry, which is struggling to meet demand due to disruptions caused by the Covid-19 pandemic. While Nvidia has seen a decline in gaming and client processor revenue, its data center and automotive businesses have performed well, offering a potential avenue for growth in the future. Despite the challenges posed by the pandemic, Nvidia remains optimistic about its prospects.