(Bloomberg) -- Nvidia Corp., the biggest maker of chips for computer graphics cards, gave a disappointing sales forecast for the current quarter, showing the lingering loss of demand from the collapse of cryptocurrency mining. The stock dropped about 16 percent.

Revenue in the fiscal fourth quarter will be $2.7 billion, plus or minus 2 percent, the Santa Clara, California-based company said in a statement. That compares to the average of analysts’ estimates of $3.4 billion, according to data compiled by Bloomberg.

The company’s founder and Chief Executive Officer Jensen Huang is trying to make Nvidia more than just the leading provider of technology that makes games more realistic. Yet the gaming market still provides the company with the bulk of its sales.

The mining of cryptocurrency tokens, computer code that carries value in online transactions, had helped stoke demand for graphics chips. Shortages related to a spike in demand from miners led to an oversupply of parts when the cryto market crashed. That inventory needs to be sold before orders for new parts will pick up again, according to analysts.

“We believe this is a near-term issue that will be corrected in one to two quarters, and remain confident in our competitive position and market opportunities,” Chief Financial Officer Colette Kress said in a statement posted on the company’s website.

Inventory at the end of the quarter was $1.42 billion, compared with $1.09 billion three months earlier.

Nvidia reported a profit of $1.23 billion, or $1.97 a share, in the third quarter, compared with $838 million, or $1.33 cents, in the same period a year earlier.

The company’s stock has dropped 30 percent since its peak a month and a half ago, reflecting concern that earnings weren’t keeping pace with the huge gains in the stock. Investors had piled into Nvidia bidding it up from $12 in 2012 to a closing high of $289.36 on Oct. 1. The shares fell to a low of $168.50 in extended trading after closing at $202.39 in New York.

Huang has promised investors that graphics chips will find a more central place in computing. AI in data centers and self-driving cars are just two areas where GPUs will grab sales, he has argued. Sales from gaming rose 13 percent to $1.76 billion but declined from the prior quarter. Data center revenue increased 58 percent to $792 million.

(Updates with comments from executive in the fifth paragraph.)

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack, Molly Schuetz

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