Specialty chip maker Nvidia (NVDA 0.95%) just closed out a record year with its fiscal fourth-quarter 2022 revenue showing strength in several of its target growth markets. But after the stock gained 125% in 2021, investors are feeling the report wasn't enough. Nvidia shares are down about 16% so far in 2022, including a 7.3% drop today, as of 11 a.m. ET.
While the company is working to grow its omniverse business in professional visualization and its automotive exposure, Nvidia's gaming and data center sales still made up over 87% of total revenue. Those two segments also both realized record annual sales, growing 61% and 58%, respectively, over the prior year. But investors seem to be focusing on management's expectations for gross margin to remain flat in the current quarter.
The company mostly known for gaming and graphics cards evolved over the course of the past year. While its gaming and data center businesses still dominate, professional visualization -- what CEO Jensen Huang refers to as the omniverse -- more than doubled year over year.
Huang also indicated demand was strong for all of the company's computing platforms, saying in a statement, "NVIDIA is propelling advances in AI, digital biology, climate sciences, gaming, creative design, autonomous vehicles and robotics – some of today's most impactful fields."
But the outlook for the first quarter of fiscal year 2023, which began Jan. 31, predicted profitability will be relatively flat, after gross margin had been on the rise over the last two years. Investors today are thinking that the stock's valuation was based on a more optimistic outlook than that, apparently.