Nvidia’s quarterly sales results hint at a downturn in crypto mining efforts

Posted: 17 August 2018 2:00 pm
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The firm’s latest fiscal results exceeded expectations but chip sales to crypto miners fell dramatically.

American technology company Nvidia has reported a significant fall in quarterly revenues for sales of its cryptocurrency-mining chips, indicating that the digital currency prospecting boom may be winding down.

Nvidia sold US$289 million worth of Graphics Processing Units (GPUs) to miners of cryptocurrencies such as bitcoin and ether in the first quarter of 2018, amounting to nearly one tenth of the firm’s overall revenue.

The business had forecast sales of US$100 million for the same products during the second quarter of the year but reported actual revenue of just US$18 million. These modest earnings fell overwhelmingly (-82%) short of Nvidia’s projected estimations and likely facilitated a reduction, as much as 5%, in the company’s share price.

“We benefited in the last several quarters from an unusual lift from crypto,” Nvidia chief executive Jensen Huang said on a conference call. “…but at this time, we consider it to be immaterial for the second half”.

Aside from poor cryptocurrency chip sales, Nvidia’s quarterly results exceeded expectations. Net income shot up by 89% to US$1.1 billion, while total quarterly revenues increased by 40% to reach US$3.12 billion.

The company’s traditional GPU sales, directed at video game enthusiasts, eclipsed analyst estimates. Nvidia sold US$1.8 billion during the second quarter of 2018, US$50 million above forecast, according to FactSet data.

Nvidia is anticipated to reveal a new generation of gaming chips ahead of the holiday shopping season.

FactSet also reported that Nvidia’s data center chips business jumped 83% to finish at US$760 million. Reuters reports that companies such as Amazon Web Services, Microsoft’s Azure and Alphabet Inc’s Google Cloud are purchasing Nvidia’s chips to help power artificial intelligence projects and other new, innovative ventures.

Nvidia projected third quarter revenue of US$3.25 billion, short of analyst’s US$3.34 billion expectations.

New research has found that only 1.18% of mined Monero blocks are from Coinhive, pulling in about US$250,000 per month. To be clear, these figures make up nearly the entire browser-based crypto mining industry. It’s a strikingly small amount for a piece of the market as prominent as Coinhive, suggesting that browser-based mining might be one of the least profitable ways of digging up digital gold.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.

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