The modern computer world would be inconceivable without the invention of the graphics chip.

And the inventor still plays a big role and is even expanding his position.

We're talking about Nvidia.

Whenever it comes to the biggest mainstream beneficiaries of the interim crypto boom, the American specialist for graphics processors is also mentioned.

Having grown up in the field of personal computers, servers and game consoles, the company also had the perfectly fitting offer ready when the crypto community desperately needed powerful graphics cards for the so-called mining of digital currencies such as bitcoins.

Recently, however, the gold rush mood around Bitcoin & Co has flattened out.

About a year ago, there was just over $67,000 for a bitcoin.

In the past few weeks, however, the prices for the oldest and best-known cryptocurrency have slipped below the $20,000 mark at times.

Other digital currencies have also taken a hit amid the general market turmoil, as investors dumped various types of investments to reflect heightened market risks.

Despite the foray into cryptocurrencies, gaming remains Nvidia's bread and butter.

But things haven't been going too well there lately.

In the course of the global corona pandemic, people initially had to stay at home more often and distract themselves.

Many also did this with the help of video games.

In the meantime, however, this special Corona boom is over for Nvidia.

Inflation and the weaker economic outlook are also having a negative impact.

People need to think harder about many of their spending.

In this case, video games may not be considered necessary expenses.

As a result, Nvidia had to report preliminary key data for the second quarter of the 2022/23 financial year (as of the end of July) that fell short of its own expectations.

Total revenue is expected to be $6.7 billion, compared to a previous guidance of $8.1 billion.

Although this would mean a slight increase of 3 percent compared to the previous year, it would correspond to a decrease of 19 percent compared to the previous quarter.

Cost control and targeted investments

The main reason for the weak performance was below-expected revenues in the said gaming area.

Here, the company reported sales of $2.04 billion, a decline in sales of 44 and 33 percent compared to the previous quarter and compared to the same period last year.

Data center revenue was $3.81 billion, up 1 percent sequentially.

Although a new record was reached here, the revenues in this area were also below expectations due to the supply chain problems around the world.

In the short term, management now wants to react with tighter cost controls and more targeted investments.

However, the share buybacks remain, also because one continues to see strong cash flow generation and high growth in the future.

With all the recent bad news, Nvidia should remain well-positioned with its graphics chips to benefit from future trends such as gaming, cryptocurrencies, autonomous driving, data centers, and most importantly, artificial intelligence.

Analyst firms confirm buy recommendation

The majority of analysts classify the share as a buy.

UBS, for example, lowered its price target from $280 to $220 after the sales warning, but continues to give Nvidia a buy recommendation.

American analysts such as JP Morgan, Mizuho Securities and Raymond James have also reacted and lowered the price target, but confirmed the buy rating.

In the tech sector, Nvidia should therefore continue to be one of the most promising stocks - although investors will need strong nerves in the future, as the price development in the recent past shows.

Impressive course development

Nvidia stock has soared over the past two years.

After a short-term, corona-related setback in March 2020 to $45, prices have increased almost eightfold in the following 20 months, with a new record high of $346 being marked in November last year.

Nvidia was dragged down by the subsequent crash in technology stocks.

The price collapsed to 144 dollars by the beginning of July this year, but has meanwhile been able to regain the 180 dollar mark at times.

In terms of charts, the Nvidia share is still in a downward trend for the time being.

Only when the 200-day line is recaptured would the trend arrows point upwards again.

In this case, the next price targets are $300 and the all-time high of $346.

Despite the recent, sharp drop in the Nvidia share price, the decade-long performance is still sensational.

Over a ten-year period (on a dollar basis), the average price gain is still 48.8 percent per year.

On a euro basis, the ten-year return is even better, averaging 51.9 percent annually.

A one-off investment of EUR 10,000 in August 2012 (opening price: EUR 2.73) would have increased by a factor of 64 to around EUR 644,000 at times.