Nvidia Clears $289 Million Crypto Mining Profits In Q1, but Expects Drop in Sales
The famous chipmaker has reported ‘better-than-expected’ results during the first quarter of the current year. But the company explained that in the next two quarters cryptocurrency-mining chip sales will be suffering an important fall. Nvidia’s stocks fell 2.2 percent on Friday after the announcement.
The first four months of 2018, the company reported revenue of $3.21 billion dollars, 11% more than expected, and just 9% of the total sales are related to crypto mining activities.
Nvidia’s Market Performance
Cryptocurrency mining activities have been expanding during the last months, mostly after the bull run that virtual currencies experienced at the end of 2017 and at the beginning of 2018. GPU producers, such as Nvidia and AMD, were very profitable the last quarter of 2017 and the first quarter of 2018.
At the end of 2017, Jen-Hsun Huang, Chief Executive Officer at Nvidia, said that cryptocurrencies are here to stay. What he said in the past is in line with what he commented now:
“The reason why they bought [GPU cards] is for gaming, but while they are not gaming; while they are at school, at work, or in bed – they will turn it on and do a little mining. There’s nothing wrong with that.”
In some specific markets in which there is a lack of GPUs – due to the increased demand – these devices can be bought for as much as twice their actual cost. However, recent news would show how Samsung has entered in game as well as Canaan Creative going after a billion dollar IPO soon. For further reading look into the ASIC resistance movement.
During a conference call, Nvidia’s CEO said:
“Crypto miners bought a lot of our GPUs in the quarter and it drove prices up. I think that a lot of gamers weren’t able to buy into the new GeForce as a result.”
At the same time, the future may look a little bit more complicated for Nvidia and AMD. Their GPUs are used primarily to mine Ethereum (ETH), but Bitmain, the giant cryptocurrency mining company launched a new Ethereum ASIC miner that would be much more profitable than Nvidia’s and AMD’s products.
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