Nvidia Corp forecast lower-than-expected revenue for the second quarter, weighed down by lower demand for its graphic processor units due to a fall in personal computer sales and a stronger dollar.
The graphic-chip maker's shares fell as much as 4.4 percent in extended trading on Thursday.
Nvidia, which competes with Advanced Micro Devices Inc and Intel Corp, forecast second-quarter revenue of $1.01 billion, plus or minus two percent, below the average analyst estimate of $1.18 billion, according to Thomson Reuters I/B/E/S.
A commercial slowdown after the Windows XP refresh and constrained demand in many regions due to currency fluctuations contributed to softness in the PC market during the first three months of the year, according to research firm IDC.
Worldwide PC shipments fell 6.7 percent to 68.5 million units in the first quarter, slightly above previous projections, and are now expected drop 4.9 percent during the year, higher than the previously forecast fall of 3.3 percent, IDC said last month.
Rival chip maker Advanced Micro Devices last month reported a steep fall in sales for the first quarter and said it expected weak demand for PCs to continue for some time.
Nvidia made its name developing graphics technology for high-end PCs, but has struggled to expand into smartphones, a market dominated by Qualcomm Inc.
The company is focusing on using its Tegra chips to power entertainment and advanced navigation systems in cars from automakers such as Volkswagen AG <VOWG_p.DE> , BMW and Tesla Motors Inc.
Nvidia's net income fell to $134 million, or 24 cents per share, in the first quarter ended April 26, missing the average estimate of 26 cents.
Revenue rose 4.4 percent to $1.15 billion, missing the average analyst estimate of $1.16 billion.
Excluding items, the company earned 33 cents per share.
Nvidia's stock was down 1.3 percent in after-market trading.
(Reporting by Kshitiz Goliya and Anya George Tharakan in Bengaluru; Editing by Simon Jennings)