Nvidia Lovelace gaming card launches in ‘really good place’ as models start at 9

Nvidia Lovelace gaming card launches in ‘really good place’ as models start at $899

Nvidia Corp. is well positioned to launch its next-generation game cards amid a consumer crisis, the chipmaker told Wall Street on Tuesday as it unveiled its next-generation chip architecture after a painful year of preparation.

During the keynote of Nvidia’s NVDA,
-1.58%
GPU Technology Conference Tuesday, Chief Executive Jensen Huang unveiled gaming chips using the company’s next-generation “Ada Lovelace” architecture by introducing the flagship RTX 4090 for a suggested retail price of $1,599. The new gaming chip, which is said to perform up to four times faster than the previous generation RTX 3090 Ti, will be available on October 12.

The new architecture is named after 19th-century English mathematician Ada Lovelace, widely regarded as the world’s first computer programmer for her work on Charles Babbage’s theoretical analytic engine.

After the keynote, Huang told analysts that while the gaming end markets are soft, they are not so soft that Nvidia will not be able to sell through excess inventory it has in the channel.

“We’re in a really good place right now,” Huang told analysts. “We’ve taken specific action, marketing programs to specifically narrow down the segment that Ada is initially targeting.”

Huang reminded analysts that Lovelace has already been delayed so that the company had enough time to set up marketing programs and clean up inventory channels, and that ramps are going from top to bottom, serving gamers who want the latest chip first.

In preparation for that, the company took “two quarters of really hard drugs,” Huang told analysts, citing several profit warnings during the year when the company hacked its revenue forecast and charged a $1.22 billion inventory cost ahead of its launch.

Huang also introduced the RTX 4080 gaming card, starting at $899, intended to run up to four times faster than the RTX 3080 Ti, along with a 16GB version starting at $1,199.

Huang said the RTX-3000 series will also remain available to mainstream gamers, with the RTX 3060 starting at $329.

Read: Nvidia Sales Forecast Drops About $1 Billion Below Expectations, Inventory Drops

The Lovelace architecture is the successor to Ampere, which was unveiled about two months after the COVID-19 pandemic amid strong demand for game cards that propelled the stock to a gain of 122% in 2020, compared to a gain of 51. % on the PHLX Semiconductor Index SOX,
-1.52%.

Now Nvidia is launching an environment where gaming demand is falling amid a consumer technology slump, and its stock is down 55% so far, compared to a 35% drop on the SOX index.

The company also launched a Lovelace GPU for designers and makers, the RTX 6000 workstation, which will ship in the fourth quarter.

Read: Chip stocks could fall another 25% as ‘we enter worst semiconductor downturn in a decade,’ analyst says

Advanced Lovelace architecture is also needed to support Nvidia’s expansion to Omniverse, its foray into the so-called metaverse, Huang said.

During the keynote, Huang also unveiled Nvidia Omniverse Cloud, the company’s first Software-as-a-Service and Infrastructure-as-a-Service product, for designing, publishing, operating and experiencing metaverse applications, the company said.

The service includes features like “Omniverse Nucleus Cloud,” which gives 3D designers and teams the ability to make changes and share scenes almost anywhere, according to Nvidia.

Read: Nvidia’s ‘China Syndrome’: Is the Stock Melting?

Early customers of Omniverse Cloud include advertising agency WPP WPP,
-0.23%

WPP,
+1.10%
and Siemens SIE,
-1.61%,
said Nvidia.

With declining consumer demand, Nvidia’s largest unit recently became a data center company with a $3.81 billion quarterly revenue contribution, a 61% year-over-year gain, compared to a 33% drop in game sales to $2.04. billion from a year ago, according to the company’s most recent earnings report.

Nvidia shares fell 2% last Tuesday in trading, compared with a 1.7% drop on the S&P 500 index SPX,
-1.43%.

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