Nvidia Q2 earnings forecast falls far short of expectations, down more than 7% at the start of the day.

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Nvidia plunged more than 8 percent in pre-market Monday after the company announced a revenue forecast for the second quarter of fiscal 2023 that fell well short of market expectations and said channel partner sales were down. Nvidia shares fell more than 7% after the U.S. stock market opened.

In its latest disclosure, NVIDIA said that for the fiscal quarter ending July 31, the company expects to achieve revenue of about $6.7 billion, down 19 percent sequentially and below the market consensus estimate of $8.1 billion. NVIDIA said the company's management will discuss the financial results and outlook in detail during an earnings call on Aug. 24 EST.

The company blamed the loss on gaming-related revenue, which is expected to fall 44 percent sequentially and 33 percent year-over-year to $2.04 billion. Conversely, data center revenue is up 61 percent year-over-year to $3.81 billion and up 1 percent sequentially. Data center revenue, while a record, was still slightly below the company's previous expectations due to the impact of supply chain disruptions.

NVIDIA founder and CEO Jensen Huang said in a statement: "Our gaming product sales are expected to decline significantly as the quarter progresses." "As we expect macroeconomic conditions to continue to impact sales, we took action with our gaming industry partners to adjust channel pricing and product inventory.

The company added that operating-type expenses will decline in the fiscal second quarter and said it will continue its share repurchase program.

Shares of chip stocks such as its rival AMD $Advanced Micro Devices (AMD.US)$ have weakened after Nvidia reported weak earnings estimates.