New York (CNN Business) China's weakening economy has claimed another corporate victim: Chipmaker Nvidia slashed its sales outlook for the fourth quarter, because of "deteriorating macroeconomic conditions, particularly in China."

Nvidia expected sales of about $2.7 billion in the quarter but said Monday that it now predicts revenue will come in around $2.2 billion. The company also said its gross profit margin will be much lower than expected.

Nvidia NVDA AMD AMD Shares ofplunged more than 16% in early trading on the news before rebounding a bit. Nvidia rivalalso fell nearly 5%.

Caterpillar CAT The broader market -- including tech stocks -- already fell sharply Monday morning after Dow componentreported earnings that missed forecasts by a wide margin. Caterpillar issued guidance that was below what Wall Street was expecting.

Nvidia, which makes high-end graphics chips used for PC video games, self-driving cars and supercomputers, said demand for games in China was hurt by broader economic weakness.

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