>> Major chip maker Nvidia shares plunged over 14% on Monday, after it gave a gloomy outlook blaming a slowdown in China's economy. The Silicon Valley based chip maker powers everything from graphics in games to self-driving cars. It's the latest tech company to warn about a negative impact from the world's second largest economy, which has been made worse by an ongoing trade war with the US.
On Monday, Nvidia warned that revenue for its latest quarter would likely come in at $2.2 billion, nearly 20% less than its earlier forecast. Nvidia shares have dropped over 50% since its high hit in October last year. Reuters Tech Correspondent Stephen Nellis.>> A lot of people think of Nvidia as a gaming chip company, but their chips have actually been used quiet heavily in cloud computing for things like artificial intelligence.
One of the big drivers of Nvidia's business over the past few years has been explosive growth of the cloud computing segment in China. The big problem that Nvidia has in the data center is actually very similar to the problem that Intel had last week. And that is specifically big companies, like cloud computing providers in China, are just not buying as much stuff.
They bought it earlier last year before the economy in China became very wobbly because of the trade conflict with the United States. That hammered Intel last week in its earnings with those cloud buyers in China.>> Intel's shares were down over a percent and a half on Monday.
Meanwhile Caterpillar, the world's largest heavy equipment maker, missed it's Wallstreet's earnings expectation as China's softening demand, higher manufacturing, and freight cost hit its profit. The stock dropped over 8% on Monday, adding drag to the overall market.