NVIDIA (NVDA 193.91, -11.76, -5.72%) is having a lower start to the week as
the high-flying GPU manufacturer prepares to report its results for the third
quarter. NVIDIA is scheduled to release its latest quarterly report after
Thursday's closing bell.
Shares of NVIDIA have had a shaky showing since the August 16 release of the company's earnings report for the second quarter. NVIDIA followed that release with a rally to a fresh record high (292.76) in early October and a slide to a ten-month low (176.01) in the weeks that followed. The stock has recovered from its ten-month low in recent weeks, currently little changed for the year overall.
Investors will be particularly interested to hear how well the new line of GeForce RTX video cards is selling, especially since there are some indications that the launch has been rockier than what the company hoped for.
Looking to refresh its gaming segment (~60% of revenue), NVIDIA presented its new ray-tracing video cards in late August. In addition to offering a modest to moderate performance boost over the GTX1000 series, the RTX2000 series introduced ray-tracing technology, which allows content creators to develop more life-like images and video.
However, gamers have yet to see the impact of ray tracing due to a software-related bottleneck. NVIDIA's RTX GPUs became available for sale at the end of September, but even the latest game releases do not yet support ray tracing or deep learning super sampling, which is another new technology introduced in the RTX line. It is believed that the features are being held back by the delayed release of Microsoft's October 2018 update for Windows 10.
The delay in unlocking NVIDIA's new technology has been well-publicized, suggesting some users may have put off their purchase plans as they see little reason to pay a premium for technology that has yet to be enabled. Granted, the issue with Microsoft's Windows update is likely to be resolved in the near future, but it should not be a surprise if NVIDIA acknowledges that early demand for its latest product was impacted negatively.
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