The world’s largest GPU manufacturers have seen profits soar since cryptocurrency mining became a phenomenon. However, it wasn’t until recently that video card manufacturers embraced cryptocurrency miners. In fact, manufacturers like AMD and Nvidia continue to release statements to this day encouraging caution about crypto mining.
Despite the caution, manufacturers have experienced record growth, with the majority of that growth linked to the crypto industry.
Cryptocurrency mining activity has sharply increased over the last two years. Mining has gone from a niche hobby to a multi-billion dollar business. Today, you can mine thousands of different coins – not just bitcoin and Litecoin.
As mining activity increased, so too did the profits of Nvidia and AMD. Our friends at CoinTelegraph recently posted a chart comparing the price of bitcoin with the price of Nvidia’s stock. The two lines are closely correlated, with both experiencing massive gains over the last year.
Nvidia, for example, was priced at around $25 in mid-2015. By the end of 2017, when the price of bitcoin was nearing $20,000, the price of Nvidia stock reached as high as $250.
Advanced Micro Devices, or AMD, experienced a similar rise. The company experienced a year-on-year revenue increase of 25% throughout 2017 – significantly higher than any of its previous seven years. The price of AMD shares dropped towards the end of 2015, but the price has been climbing ever since.
We hear a lot about Nvidia and AMD. But there are plenty of other GPU manufacturers. ASUS, for example, manufactures GPUs. The company’s stock price dipped sharply at the end of May 2018, then reversed suddenly and started rising when the company announced the release of its second-generation cryptocurrency mining motherboard on May 30, 2018.
All of this goes to show that GPU manufacturers are closely tied to cryptocurrency mining activity. As mining activity increases, so too has the value of GPU manufacturers.
Manufacturers Were Initially Hesitant To Embrace Cryptocurrencies
You could argue that cryptocurrency mining has been the best thing to happen to GPU manufacturers since the rise of PC gaming.
However, GPU manufacturers were initially hesitant to embrace the crypto mining industry – despite the incredible growth it has created.
These companies continue to avoid wholeheartedly embracing the crypto industry. In January 2018, for example, Nvidia issued a statement encouraging their trading partners to limit the sale of graphics card to miners. The company was concerned about its core customer base: PC gamers. Gamers were being increasingly priced out of the market.
Video card stock shortages were rampant throughout 2017. High-end video cards were being sold for higher prices on secondary markets than they were at retail stores.
AMD issued a similar statement. In a press release to investors in early 2018, the company explained that cryptocurrency mining was not part of their long-term growth strategy:
“We had significant growth in the GPU business outside of Blockchain in Q4’17 as we ramped our Radeon Vega products, our GPU compute products, and our Apple business. We appreciate the time and attention that investors continue to pay to Blockchain and cryptocurrency, but would also like to keep it in perspective with the multiple other growth opportunities ahead for AMD.”
AMD has been more cautious than Nvidia about the cryptocurrency industry. Even as late as 2017 and 2018, the manufacturer has called crypto mining as “distraction” relative to the company’s other business.
Finally, ASUS recently released a statement recognizing that the volatility of cryptocurrency mining made it a dangerous gamble:
“Mining is a numbers game; it’s only worthwhile if the value of the cryptocurrency you generate exceeds the cost of producing it.”
What Does The Future Hold For Video Card Manufacturers?
Video card manufacturers are consistently reporting higher profits through Q1 2018. Nvidia released “higher than expected” sales figures of $289 million, for example, although they’re expecting a smaller figure for Q2 2018.
AMD, meanwhile, expects graphics demand to be
“strong throughout the first half of 2018” and claimed that crypto mining “contributed roughly 10% (or possibly more of the company’s annual revenue and a third of the company’s $140 million in sequential growth.” The company predicts double digit growth for 2018.
Right now, the future looks bright for video card manufacturers like AMD, Nvidia, and ASUS. However, these tech giants are being cautiously optimistic. They don’t want to embrace crypto mining wholeheartedly. All it takes is one swing of the market. Miners might sell off their rigs, flooding the market with cheap GPUs. These companies would be foolish to fully jump on board the crypto industry – but wise to embrace it in the near future.