After the fiscal Q3'2019 report, the majority of the sell-side community was utterly shocked by the size of Nvidia's (NASDAQ:NVDA) miss. Nvidia has had a phenomenal track record of delivering beat-and-raise quarters.
The real miss was on the gaming side, coming in nearly 7% lower than expectations. The cryptocurrency bubble continuously downplayed by management actually hit Nvidia harder than expected, with revenues falling far below guidance. Unfortunately for the bulls, because management overestimated the demand within the GeForce lineup, it overproduced. This created an inventory glut. This glut, according to management, will take multiple quarters to work through. While the entire market was focused on the effect a crypto bubble would have on AMD (NASDAQ:AMD), the market underestimated (partly in thanks to management's comments) the effect lowered crypto demand would have on sales. Now, despite the fact that Nvidia has come to market with its RTX graphics card lineup, it is going to have inventory issues, particularly with the sales of GTX 1060, 1070, and 1080 cards. These were some of the more popular GPU choices from Nvidia in the crypto mining realm.