Nvidia (NVDA  ) shares were 5% lower following the company's fiscal Q1 earnings report. Due to weak guidance, investors sold despite the company beating expectations on the top and bottom line. The company also said it will slow its spending and focus on costs in response to the more challenging environment.

Just like the weakness that we saw in e-commerce stocks eventually materialized in the performance of digital advertising stocks like Snap (SNAP  ) or Facebook (FB  ), it seems apparent that a slowdown in tech and crypto would impact sales of Nvidia's chips.

Many of Nvidia's products are selling below MSRP on secondary markets, which is a big change from the past couple of years when they would only be available at meaty markups. Enterprise spending continues to be strong and grow at a double-digit clip, but this could soften based on what we are seeing go on with the broader tech sector, and it's not enough to offset the weakness in other segments.

Inside the Numbers

In Q1, Nvidia reported $1.36 in EPS, topping expectations of $1.29. Revenue also beat at $8.3 billion vs $8.1 billion, a 46% increase from last year.

However, the company's operating expenses increased by 35%. It also noted a $500 million impact from Russia's invasion of Ukraine and the lockdowns in China. Its guidance for $8.1 billion in Q2 revenue also missed expectations of $8.5 billion.

Even with this miss, the company's growth rate remains exceptional. The data center segment was up 83%, exceeding gaming revenue which was up 31%. Gaming revenue is expected to slow down given the pull-forward in demand during the pandemic and the likely impact of inflation on consumer spending. The company sees gaming revenue growth should decline to the mid-teens, and inventory shortages have mostly normalized.

The company also announced an additional $15 billion in share buybacks through 2023, equating to about 7% of its market cap. YTD, Nvidia is down nearly 50%. It's largely due to market sentiment and a change in risk appetites as the company is continuing to perform well. Still, it's reasonable to expect some more slowing in growth due to weakness in the broader tech market.